G.R. No.
149547             July 4, 2008 both airlines disowned liability and blamed each other for the fiasco. On 15 August 1997, private respondent
PHILIPPINE AIRLINES, INC., petitioner, vs. HON. ADRIANO SAVILLO, Presiding Judge of RTC Branch
30 , Iloilo City, and SIMPLICIO GRIÑO, respondents.
CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the Decision1 dated 17
August 2001, rendered by the Court of Appeals in CA-G.R. SP No. 48664, affirming in toto the Order2 dated 9
June 1998, of Branch 30 of the Regional Trial Court (RTC) of Iloilo City, dismissing the Motion to Dismiss filed
by petitioner Philippine Airlines Inc. (PAL) in the case entitled, Simplicio Griño v. Philippine Airlines, Inc. and
Singapore Airlines, docketed as Civil Case No. 23773.
PAL is a corporation duly organized under Philippine law, engaged in the business of providing air carriage for
passengers, baggage and cargo.3
Public respondent Hon. Adriano Savillo is the presiding judge of Branch 30 of the Iloilo RTC, where Civil Case
No. 23773 was filed; while private respondent Simplicio Griño is the plaintiff in the aforementioned case.
The facts are undisputed.
Private respondent was invited to participate in the 1993 ASEAN Seniors Annual Golf Tournament held in
Jakarta, Indonesia. He and several companions decided to purchase their respective passenger tickets from
PAL with the following points of passage: MANILA-SINGAPORE-JAKARTA-SINGAPORE-MANILA. Private
respondent and his companions were made to understand by PAL that its plane would take them from Manila
to Singapore, while Singapore Airlines would take them from Singapore to Jakarta.4
On 3 October 1993, private respondent and his companions took the PAL flight to Singapore and arrived at
about 6:00 o’clock in the evening. Upon their arrival, they proceeded to the Singapore Airlines office to check-
in for their flight to Jakarta scheduled at 8:00 o’clock in the same evening. Singapore Airlines rejected the
tickets of private respondent and his group because they were not endorsed by PAL. It was explained to
private respondent and his group that if Singapore Airlines honored the tickets without PAL’s endorsement,
PAL would not pay Singapore Airlines for their passage. Private respondent tried to contact PAL’s office at the
airport, only to find out that it was closed.5
Stranded at the airport in Singapore and left with no recourse, private respondent was in panic and at a loss
where to go; and was subjected to humiliation, embarrassment, mental anguish, serious anxiety, fear and
distress. Eventually, private respondent and his companions were forced to purchase tickets from Garuda
Airlines and board its last flight bound for Jakarta. When they arrived in Jakarta at about 12:00 o’clock
midnight, the party who was supposed to fetch them from the airport had already left and they had to arrange
for their transportation to the hotel at a very late hour. After the series of nerve-wracking experiences, private
respondent became ill and was unable to participate in the tournament. 6
Upon his return to the Philippines, private respondent brought the matter to the attention of PAL. He sent a
demand letter to PAL on 20 December 1993 and another to Singapore Airlines on 21 March 1994. However,
filed a Complaint for Damages before the RTC docketed as Civil Case No. 23773, seeking compensation for
moral damages in the amount of P1,000,000.00 and attorney’s fees.7
Instead of filing an answer to private respondent’s Complaint, PAL filed a Motion to Dismiss8 dated 18
September 1998 on the ground that the said complaint was barred on the ground of prescription under
Section 1(f) of Rule 16 of the Rules of Court.9 PAL argued that the Warsaw Convention,10 particularly Article 29
thereof,11 governed this case, as it provides that any claim for damages in connection with the international
transportation of persons is subject to the prescription period of two years. Since the Complaint was filed on
15 August 1997, more than three years after PAL received the demand letter on 25 January 1994, it was
already barred by prescription.
On 9 June 1998, the RTC issued an Order 12 denying the Motion to Dismiss. It maintained that the provisions of
the Civil Code and other pertinent laws of the Philippines, not the Warsaw Convention, were applicable to the
present case.
The Court of Appeals, in its assailed Decision dated 17 August 2001, likewise dismissed the Petition for
Certiorari filed by PAL and affirmed the 9 June 1998 Order of the RTC. It pronounced that the application of
the Warsaw Convention must not be construed to preclude the application of the Civil Code and other
pertinent laws. By applying Article 1144 of the Civil Code, 13 which allowed for a ten-year prescription period,
the appellate court declared that the Complaint filed by private respondent should not be dismissed.14
Hence, the present Petition, in which petitioner raises the following issues:
I
THE COURT OF APPEALS ERRED IN NOT GIVING DUE COURSE TO THE PETITION AS
RESPONDENT JUDGE COMMITED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF
JURSIDICTION IN DENYING PAL’S MOTION TO DISMISS.
II
THE COURT OF APPEALS ERRED IN NOT APPLYING THE PROVISIONS OF THE WARSAW
CONVENTION DESPITE THE FACT THAT GRIÑO’S CAUSE OF ACTION AROSE FROM A
BREACH OF CONTRACT FOR INTERNATIONAL AIR TRANSPORT.
III
THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE COMPLAINT FILED BY GRIÑO
BEYOND THE TWO (2)-YEAR PERIOD PROVIDED UNDER THE WARSAW CONVENTION IS
ALREADY BARRED BY PRESCRIPTION.15
The petition is without merit.
In determining whether PAL’s Motion to Dismiss should have been granted by the trial court, it must be
ascertained if all the claims made by the private respondent in his Complaint are covered by the Warsaw
Convention, which effectively bars all claims made outside the two-year prescription period provided under
Article 29 thereof. If the Warsaw Convention covers all of private respondent’s claims, then Civil Case No.
23773 has already prescribed and should therefore be dismissed. On the other hand, if some, if not all, of
respondent’s claims are outside the coverage of the Warsaw Convention, the RTC may still proceed to hear
the case.
The Warsaw Convention applies to "all international transportation of persons, baggage or goods performed
by any aircraft for hire." It seeks to accommodate or balance the interests of passengers seeking recovery for
personal injuries and the interests of air carriers seeking to limit potential liability. It employs a scheme of strict
liability favoring passengers and imposing damage caps to benefit air carriers. 16 The cardinal purpose of the
Warsaw Convention is to provide uniformity of rules governing claims arising from international air travel; thus,
it precludes a passenger from maintaining an action for personal injury damages under local law when his or
her claim does not satisfy the conditions of liability under the Convention.17
Article 19 of the Warsaw Convention provides for liability on the part of a carrier for "damages occasioned by
delay in the transportation by air of passengers, baggage or goods." Article 24 excludes other remedies by
further providing that "(1) in the cases covered by articles 18 and 19, any action for damages, however
founded, can only be brought subject to the conditions and limits set out in this convention." Therefore, a claim
covered by the Warsaw Convention can no longer be recovered under local law, if the statute of limitations of
two years has already lapsed.
Nevertheless, this Court notes that jurisprudence in the Philippines and the United States also recognizes that
the Warsaw Convention does not "exclusively regulate" the relationship between passenger and carrier on an
international flight. This Court finds that the present case is substantially similar to cases in which the
damages sought were considered to be outside the coverage of the Warsaw Convention.
In United Airlines v. Uy,18 this Court distinguished between the (1) damage to the passenger’s baggage and (2)
humiliation he suffered at the hands of the airline’s employees. The first cause of action was covered by the
Warsaw Convention which prescribes in two years, while the second was covered by the provisions of the
Civil Code on torts, which prescribes in four years.
Similar distinctions were made in American jurisprudence. In Mahaney v. Air France,19 a passenger was
denied access to an airline flight between New York and Mexico, despite the fact that she held a confirmed
reservation. The court therein ruled that if the plaintiff were to claim damages based solely on the delay she
experienced – for instance, the costs of renting a van, which she had to arrange on her own as a
consequence of the delay – the complaint would be barred by the two-year statute of limitations. However,
where the plaintiff alleged that the airlines subjected her to unjust discrimination or undue or unreasonable
preference or disadvantage, an act punishable under the United States laws, then the plaintiff may claim
purely nominal compensatory damages for humiliation and hurt feelings, which are not provided for by the
Warsaw Convention. In another case, Wolgel v. Mexicana Airlines,20 the court pronounced that actions for
damages for the "bumping off" itself, rather than the incidental damages due to the delay, fall outside the
Warsaw Convention and do not prescribe in two years.
In the Petition at bar, private respondent’s Complaint alleged that both PAL and Singapore Airlines were guilty
of gross negligence, which resulted in his being subjected to "humiliation, embarrassment, mental anguish,
serious anxiety, fear and distress."21 The emotional harm suffered by the private respondent as a result of
having been unreasonably and unjustly prevented from boarding the plane should be distinguished from the
actual damages which resulted from the same incident. Under the Civil Code provisions on tort,22 such
emotional harm gives rise to compensation where gross negligence or malice is proven.
The instant case is comparable to the case of Lathigra v. British Airways.23
In Lathigra, it was held that the airlines’ negligent act of reconfirming the passenger’s reservation days before
departure and failing to inform the latter that the flight had already been discontinued is not among the acts
covered by the Warsaw Convention, since the alleged negligence did not occur during the performance of the
contract of carriage but, rather, days before the scheduled flight.
In the case at hand, Singapore Airlines barred private respondent from boarding the Singapore Airlines flight
because PAL allegedly failed to endorse the tickets of private respondent and his companions, despite PAL’s
assurances to respondent that Singapore Airlines had already confirmed their passage. While this fact still
needs to be heard and established by adequate proof before the RTC, an action based on these allegations
will not fall under the Warsaw Convention, since the purported negligence on the part of PAL did not occur
during the performance of the contract of carriage but days before the scheduled flight. Thus, the present
action cannot be dismissed based on the statute of limitations provided under Article 29 of the Warsaw
Convention.
Had the present case merely consisted of claims incidental to the airlines’ delay in transporting their
passengers, the private respondent’s Complaint would have been time-barred under Article 29 of the Warsaw
Convention. However, the present case involves a special species of injury resulting from the failure of PAL
and/or Singapore Airlines to transport private respondent from Singapore to Jakarta – the profound distress,
fear, anxiety and humiliation that private respondent experienced when, despite PAL’s earlier assurance that
Singapore Airlines confirmed his passage, he was prevented from boarding the plane and he faced the
daunting possibility that he would be stranded in Singapore Airport because the PAL office was already
closed.
These claims are covered by the Civil Code provisions on tort, and not within the purview of the Warsaw
Convention. Hence, the applicable prescription period is that provided under Article 1146 of the Civil Code:
Art. 1146. The following actions must be instituted within four years:
(1) Upon an injury to the rights of the plaintiff;
(2) Upon a quasi-delict.
Private respondent’s Complaint was filed with the RTC on 15 August 1997, which was less than four years
since PAL received his extrajudicial demand on 25 January 1994. Thus, private respondent’s claims have not
yet prescribed and PAL’s Motion to Dismiss must be denied.
Moreover, should there be any doubt as to the prescription of private respondent’s Complaint, the more
prudent action is for the RTC to continue hearing the same and deny the Motion to Dismiss. Where it cannot
be determined with certainty whether the action has already prescribed or not, the defense of prescription
cannot be sustained on a mere motion to dismiss based on what appears to be on the face of the
complaint.24 And where the ground on which prescription is based does not appear to be indubitable, the court
may do well to defer action on the motion to dismiss until after trial on the merits. 25 IN VIEW OF THE
FOREGOING, the instant Petition is DENIED. The assailed Decision of the Court of Appeals in CA-G.R. SP
No. 48664, promulgated on 17 August 2001 is AFFIRMED. Costs against the petitioner. SO ORDERED.
G.R. No. L-31150 July 22, 1975
KONINKLIJKE LUCHTVAART MAATSHAPPIJ N.V., otherwise known as KLM ROYAL DUTCH
AIRLINES, petitioner, vs. THE HONORABLE COURT OF APPEALS, CONSUELO T. MENDOZA and
RUFINO T. MENDOZA, respondents.
Picazo, Agcaoili, Santayana, Reyes and Tayao for petitioner. Bengzon, Villegas, Zarraga, Narciso and Cudala
for respondents.
CASTRO, J.:
In this appeal by way of certiorari  the Koninklijke Luchtvaart Maatschappij N.V., otherwise known as the KLM
Royal Dutch Airlines (hereinafter referred to as the KLM) assails the award of damages made by the Court of
Appeals in CA-G.R. 40620 in favor of the spouses Rufino T. Mendoza and Consuelo T. Mendoza (hereinafter
referred to as the respondents). 1äwphï1.ñët
Sometime in March 1965 the respondents approached Tirso Reyes, manager of a branch of the Philippine
Travel Bureau, a travel agency, for consultations about a world tour which they were intending to make with
their daughter and a niece. Reyes submitted to them, after preliminary discussions, a tentative itinerary which
prescribed a trip of thirty-five legs; the respondents would fly on different airlines. Three segments of the trip,
the longest, would be via KLM. The respondents expressed a desire to visit Lourdes, France, and discussed
with Reyes two alternate routes, namely, Paris to Lourdes and Barcelona to Lourdes. The respondents
decided on the Barcelona-Lourdes route with knowledge that only one airline, Aer Lingus, serviced it.
The Philippine Travel Bureau to which Reyes was accredited was an agent for international air carriers which
are members of the International Air Transport Association, popularly known as the "IATA," of which both the
KLM and the Aer Lingus are members.
After about two weeks, the respondents approved the itinerary prepared for them, and asked Reyes to make
the necessary plane reservations. Reyes went to the KLM, for which the respondents had expressed
preference. The KLM thereafter secured seat reservations for the respondents and their two companions from
the carriers which would ferry them throughout their trip, with the exception of Aer Lingus. When the
respondents left the Philippines (without their young wards who had enplaned much earlier), they were issued
KLM tickets for their entire trip. However, their coupon for the Aer Lingus portion (Flight 861 for June 22, 1965)
was marked "RQ" which meant "on request".
After sightseeing in American and European cities (they were in the meantime joined by their two young
companions), the respondents arrived in Frankfurt, Germany. They went to a KLM office there and obtained a
confirmation from Aer Lingus of seat reservations on flight 861. After meandering in London, Paris and Lisbon,
the foursome finally took wing to Barcelona for their trip to Lourdes, France.
In the afternoon of June 22, 1965 the respondents with their wards went to the Barcelona airport to take their
plane which arrived at 4:00 o'clock. At the airport, the manager of Aer Lingus directed the respondents to
check in. They did so as instructed and were accepted for passage. However, although their daughter and
niece were allowed to take the plane, the respondents were off-loaded on orders of the Aer Lingus manager
who brusquely shoved them aside with the aid of a policeman and who shouted at them, "Conos! Ignorantes
Filipinos!"
Mrs. Mendoza later called up the manager of Aer Lingus and requested that they provide her and her husband
means to get to Lourdes, but the request was denied. A stranger, however, advised them to take a train, which
the two did; despite the third class accommodations and lack of food service, they reached Lourdes the
following morning. During the train trip the respondents had to suffer draft winds as they wore only minimum
clothing, their luggage having gone ahead with the Aer Lingus plane. They spent $50 for that train trip; their
plane passage was worth $43.35.
On March 17, 1966 the respondents, referring to KLM as the principal of Aer Lingus, filed a complaint for
damages with the Court of First Instance of Manila arising from breach of contract of carriage and for the
humiliating treatment received by them at the hands of the Aer Lingus manager in Barcelona. After due
hearing, the trial court awarded damages to the respondents as follows: $43.35 or its peso equivalent as
actual damages, P10,000 as moral damages, P5,000 as exemplary damages, and P5,000 as attorney's fees,
and expenses of litigation.
Both parties appealed to the Court of Appeals. The KLM sought complete exoneration; the respondents
prayed for an increase in the award of damages. In its decision of August 14, 1969 the Court of Appeals
decreed as follows: "Appellant KLM is condemned to pay unto the plaintiffs the sum of $43.35 as actual
damages; P50,000 as moral damages; and P6,000 as attorney's fees and costs."
Hence, the present recourse by the KLM.
The KLM prays for exculpation from damages on the strength of the following particulars which were
advanced to but rejected by the Court of Appeals:
(a) The air tickets issued to the respondents stipulate that carriage thereunder is subject to the "Convention for
the Unification of Certain Rules Relating to International Transportation by Air," otherwise known as the
"Warsaw Convention," to which the Philippine Government is a party by adherence, and which pertinently
provides.1
ART. 30. (1) In the case of transportation to be performed by various successive carriers
and failing within the definition set out in the third paragraph of Article I, each carrier who
accepts passengers, baggage, or goods shall be subject to the rules set out in the
convention, and shall be deemed to be one of the contracting parties to the contract of
 transportation insofar as the contract deals with that part of transportation which is
performed under his supervision. 2
(2) In the case of transportation of this nature, the passenger or his representative can take
action only against the carrier who performed the transportation during which the accident
or the delay occured, save in the case where, by express agreement, the first carrier has
assumed liability for the whole journey. (emphasis supplied)
(b) On the inside front cover of each ticket the following appears under the heading "Conditions of Contract":
1 ... (a) Liability of carrier for damages shall be limited to occurrences on its own line, except
in the case of checked baggage as to which the passenger also has a right of action against
the first or last carrier. A carrier issuing a ticket or checking baggage for carriage over the
lines of others does so only as agent..
(c) All that the KLM did after the respondents completed their arrangements with the travel agency was to
request for seat reservations among the airlines called for by the itinerary submitted to the KLM and to issue
tickets for the entire flight as a ticket-issuing agent.
The respondents rebut the foregoing arguments, thus:
(a) Article 30 of the Warsaw Convention has no application in the case at bar which involves, not an accident
or delay, but a willful misconduct on the part of the KLM's agent, the Aer Lingus. Under article 25 of the same
Convention the following is prescribed:
ART. 25. (1) The carrier shall not be entitled to avail himself of the provisions of this
convention which exclude or limit his liability, if the damage is caused by his willful
misconduct  or by such default on his part as, in accordance with the law of the court to
which the case is submitted, is considered to be equivalent to willful misconduct. 3
(2) Similarly, the carrier shall not be entitled to avail himself of the said provisions, if the
damage is caused under the same circumstances by any agent of the carrier acting within
the scope of his employment. (emphasis by respondents)
(b) The condition in their tickets which purportedly excuse the KLM from liability appears in very small print, to
read which, as found by the Court of Appeals, one has practically to use a magnifying glass.
(c) The first paragraph of the "Conditions of Contract" appearing identically on the KLM tickets issued to them
idubitably shows that their contract was one of continuous air transportation around the world:
1 ... "carriage" includes the air carrier issuing this ticket and all carriers that carry or
undertake to carry the passenger or his baggage hereunder or perform any other service
incidental to such air carriage... Carriage to be performed hereunder by several successive
carrier is regarded as a single operation.
(d) The contract of air transportation was exclusively between the respondents and the KLM, the latter merely
endorsing its performance to other carriers, like Aer Lingus, as its subcontractors or agents, as evidenced by
the passage tickets themselves which on their face disclose that they are KLM tickets. Moreover, the
respondents dealt only with KLM through the travel agency.
1. The applicability insisted upon by the KLM of article 30 of the Warsaw Convention cannot be sustained.
That article presupposes the occurrence of either an accident or a delay, neither of which took place at the
Barcelona airport; what is here manifest, instead, is that the Aer Lingus, through its manager there, refused to
transport the respondents to their planned and contracted destination.
2. The argument that the KLM should not be held accountable for the tortious conduct of Aer Lingus because
of the provision printed on the respondents' tickets expressly limiting the KLM's liability for damages only to
occurrences on its own lines is unacceptable. As noted by the Court of Appeals that condition was printed in
letters so small that one would have to use a magnifying glass to read the words. Under the circumstances, it
would be unfair and inequitable to charge the respondents with automatic knowledge or notice of the said
condition so as to preclude any doubt that it was fairly and freely agreed upon by the respondents when they
accepted the passage tickets issued to them by the KLM. As the airline which issued those tickets with the
knowledge that the respondents would be flown on the various legs of their journey by different air carriers,
the KLM was chargeable with the duty and responsibility of specifically informing the respondents of
conditions prescribed in their tickets or, in the very least, to ascertain that the respondents read them before
they accepted their passage tickets. A thorough search of the record, however, inexplicably fails to show that
any effort was exerted by the KLM officials or employees to discharge in a proper manner this responsibility to
the respondents. Consequently, we hold that the respondents cannot be bound by the provision in question by
which KLM unilaterally assumed the role of a mere ticket-issuing agent for other airlines and limited its liability
only to untoward occurrences on its own lines.
3. Moreover, as maintained by the respondents and the Court of Appeals, the passage tickets of the
respondents provide that the carriage to be performed thereunder by several successive carriers "is to be
regarded as a single operation," which is diametrically incompatible with the theory of the KLM that the
respondents entered into a series of independent contracts with the carriers which took them on the various
segments of their trip. This position of KLM we reject. The respondents dealt exclusively with the KLM which
issued them tickets for their entire trip and which in effect guaranteed to them that they would have sure space
in Aer Lingus flight 861. The respondents, under that assurance of the internationally prestigious KLM,
naturally had the right to expect that their tickets would be honored by Aer Lingus to which, in the legal sense,
the KLM had indorsed and in effect guaranteed the performance of its principal engagement to carry out the
respondents' scheduled itinerary previously and mutually agreed upon between the parties.
4. The breach of that guarantee was aggravated by the discourteous and highly arbitrary conduct of an official
of the Aer Lingus which the KLM had engaged to transport the respondents on the Barcelona-Lourdes
segment of their itinerary. It is but just and in full accord with the policy expressly embodied in our civil law
which enjoins courts to be more vigilant for the protection of a contracting party who occupies an inferior
position with respect to the other contracting party, that the KLM should be held responsible for the abuse,
injury and embarrassment suffered by the respondents at the hands of a supercilious boor of the Aer Lingus.
ACCORDINGLY, the judgment of the Court of Appeals dated August 14, 1969 is affirmed, at KLM's cost.

G.R. No. 71929 December 4, 1990
ALITALIA, Petitioner, vs.  INTERMEDIATE APPELLATE COURT and FELIPA E. PABLO, Respondents.
NARVASA, J.:
 Dr. Felipa Pablo — an associate professor in the University of the Philippines, and a research grantee of the
Philippine Atomic Energy Agency — was invited to take part at a meeting of the Department of Research and
Isotopes of the Joint FAO-IAEA Division of Atomic Energy in Food and Agriculture of the United Nations in
Ispra, Italy. She was invited in view of her specialized knowledge in "foreign substances in food and the
agriculture environment." She accepted the invitation, and was then scheduled by the organizers, to read a
paper on "The Fate of Radioactive Fusion Products Contaminating Vegetable Crops." The program
announced that she would be the second speaker on the first day of the meeting. To fulfill this engagement,
Dr. Pablo booked passage on petitioner airline, ALITALIA.
She arrived in Milan on the day before the meeting in accordance with the itinerary and time table set for her
by ALITALIA. She was however told by the ALITALIA personnel there at Milan that her luggage was "delayed
inasmuch as the same . . . (was) in one of the succeeding flights from Rome to Milan." Her luggage consisted
of two (2) suitcases: one contained her clothing and other personal items; the other, her scientific papers,
slides and other research material. But the other flights arriving from Rome did not have her baggage on
board.
By then feeling desperate, she went to Rome to try to locate her bags herself. There, she inquired about her
suitcases in the domestic and international airports, and filled out the forms prescribed by ALITALIA for people
in her predicament. However, her baggage could not be found. Completely distraught and discouraged, she
returned to Manila without attending the meeting in Ispra, Italy.
Once back in Manila she demanded that ALITALIA make reparation for the damages thus suffered by her.
ALITALIA offered her "free airline tickets to compensate her for any alleged damages. . . ." She rejected the
offer, and forthwith commenced the action which has given rise to the present appellate proceedings.
As it turned out, Prof. Pablo's suitcases were in fact located and forwarded to Ispra, Italy, but only on the day
after her scheduled appearance and participation at the U.N. meeting there. Of course Dr. Pablo was no
longer there to accept delivery; she was already on her way home to Manila. And for some reason or other,
the suitcases were not actually restored to Prof. Pablo by ALITALIA until eleven (11) months later, and four (4)
months after institution of her action.
After appropriate proceedings and trial, the Court of First Instance rendered judgment in Dr. Pablo's favor:
"(1) Ordering the defendant (ALITALIA) to pay . . . (her) the sum of TWENTY THOUSAND PESOS
(P20,000.00), Philippine Currency, by way of nominal damages;
(2) Ordering the defendant to pay . . . (her) the sum of FIVE THOUSAND PESOS (P5,000.00),
Philippine Currency, as and for attorney's fees; (and)
(3) Ordering the defendant to pay the costs of the suit."
ALITALIA appealed to the Intermediate Appellate Court but failed to obtain a reversal of the judgment. Indeed,
the Appellate Court not only affirmed the Trial Court's decision but also increased the award of nominal
damages payable by ALITALIA to P40,000.00. That increase it justified as follows:
"Considering the circumstances, as found by the Trial Court and the negligence committed by
defendant, the amount of P20,000.00 under present inflationary conditions as awarded . . . to the
plaintiff as nominal damages, is too little to make up for the plaintiff's frustration and disappointment
in not being able to appear at said conference; and for the embarrassment and humiliation she
suffered from the academic community for failure to carry out an official mission for which she was
singled out by the faculty to represent her institution and the country. After weighing carefully all the
considerations, the amount awarded to the plaintiff for nominal damages and attorney's fees should
be increased to the cost of her round trip air fare or at the present rate of peso to the dollar at
P40,000,00."
ALITALIA has appealed to this Court on Certiorari. Here, it seeks to make basically the same points it tried to
make before the Trial Court and the Intermediate Appellate Court, i.e.:
1) that the Warsaw Convention should have been applied to limit ALITALIA'S liability; and
2) that there is no warrant in fact or in law for the award to Dr. Pablo of nominal damages and
attorney's fees.
In addition, ALITALIA postulates that it was error for the Intermediate Appellate Court to have refused to pass
on all the assigned errors and in not stating the facts and the law on which its decision is based.
Under the Warsaw Convention, an air carrier is made liable for damages for:
1) the death, wounding or other bodily injury of a passenger if the accident causing it took place on
board the aircraft or in the course of its operations of embarking or disembarking;
2) the destruction or loss of, or damage to, any registered luggage or goods, if the occurrence
causing it took place during the carriage by air;" and
3) delay in the transportation by air of passengers, luggage or goods.
In these cases, it is provided in the Convention that the "action for damages, however, founded, can only be
brought subject to conditions and limits set out" therein.
The Convention also purports to limit the liability of the carriers in the following manner:
1. In the carriage of passengers the liability of the carrier for each passenger is limited to the sum of
250,000 francs . . . Nevertheless, by special contract, the carrier and the passenger may agree to a
higher limit of liability.
:
2. a) In the carriage of registered baggage and of cargo, the liability of the carrier is limited to a sum
of 250 francs per kilogramme, unless the passenger or consignor has made, at the time when the
package was handed over to the carrier, a special declaration of interest in delivery at destination
 and has paid a supplementary sum if the case so requires. In that case the carrier will be liable to pay
a sum not exceeding the declared sum, unless he proves that sum is greater than the actual value to
the consignor at delivery.
b) In the case of loss, damage or delay of part of registered baggage or cargo, or of any object
contained therein, the weight to be taken into consideration in determining the amount to which the
carrier's liability is limited shall be only the total weight of the package or packages concerned.
Nevertheless, when the loss, damage or delay of a part of the registered baggage or cargo, or of an
object contained therein, affects the value of other packages covered by the same baggage check or
the same air way bill, the total weight of such package or packages shall also be taken into
consideration in determining the limit of liability.
3. As regards objects of which the passenger takes charge himself the liability of the carrier is limited
to 5000 francs per passenger.
4. The limits prescribed . . shall not prevent the court from awarding, in accordance with its own law,
in addition, the whole or part of the court costs and of the other expenses of litigation incurred by the
plaintiff. The foregoing provision shall not apply if the amount of the damages awarded, excluding
court costs and other expenses of the litigation, does not exceed the sum which the carrier has
offered in writing to the plaintiff within a period of six months from the date of the occurrence causing
the damage, or before the commencement of the action, if that is later.
The Warsaw Convention however denies to the carrier availment "of the provisions which exclude or limit his
liability, if the damage is caused by his willful misconduct or by such default on his part as, in accordance with
the law of the court seized of the case, is considered to be equivalent to willful misconduct," or "if the damage
is (similarly) caused . . by any agent of the carrier acting within the scope of his employment." The Hague
Protocol amended the Warsaw Convention by removing the provision that if the airline took all necessary
steps to avoid the damage, it could exculpate itself completely, and declaring the stated limits of liability not
applicable "if it is proved that the damage resulted from an act or omission of the carrier, its servants or
agents, done with intent to cause damage or recklessly and with knowledge that damage would probably
result." The same deletion was effected by the Montreal Agreement of 1966, with the result that a passenger
could recover unlimited damages upon proof of willful misconduct.
The Convention does not thus operate as an exclusive enumeration of the instances of an airline's liability, or
as an absolute limit of the extent of that liability. Such a proposition is not borne out by the language of the
Convention, as this Court has now, and at an earlier time, pointed out. Moreover, slight reflection readily leads
to the conclusion that it should be deemed a limit of liability only in those cases where the cause of the death
or injury to person, or destruction, loss or damage to property or delay in its transport is not attributable to or
attended by any willful misconduct, bad faith, recklessness, or otherwise improper conduct on the part of any
official or employee for which the carrier is responsible, and there is otherwise no special or extraordinary form
of resulting injury. The Convention's provisions, in short, do not "regulate or exclude liability for other breaches
of contract by the carrier" or misconduct of its officers and employees, or for some particular or exceptional
type of damage. Otherwise, "an air carrier would be exempt from any liability for damages in the event of its
absolute refusal, in bad faith, to comply with a contract of carriage, which is absurd." Nor may it for a moment
be supposed that if a member of the aircraft complement should inflict some physical injury on a passenger, or
maliciously destroy or damage the latter's property, the Convention might successfully be pleaded as the sole
gauge to determine the carrier's liability to the passenger. Neither may the Convention be invoked to justify the
disregard of some extraordinary sort of damage resulting to a passenger and preclude recovery therefor
beyond the limits set by said Convention. It is in this sense that the Convention has been applied, or ignored,
depending on the peculiar facts presented by each case.
In Pan American World Airways, Inc. v. I.A.C., for example, the Warsaw Convention was applied as regards
the limitation on the carrier's liability, there being a simple loss of baggage without any otherwise improper
conduct on the part of the officials or employees of the airline or other special injury sustained by the
passenger.
On the other hand, the Warsaw Convention has invariably been held inapplicable, or as not restrictive of the
carrier's liability, where there was satisfactory evidence of malice or bad faith attributable to its officers and
employees. Thus, an air carrier was sentenced to pay not only compensatory but also moral and exemplary
damages, and attorney's fees, for instance, where its employees rudely put a passenger holding a first-class
ticket in the tourist or economy section, or ousted a brown Asiatic from the plane to give his seat to a white
man, or gave the seat of a passenger with a confirmed reservation to another, or subjected a passenger to
extremely rude, even barbaric treatment, as by calling him a "monkey." 
In the case at bar, no bad faith or otherwise improper conduct may be ascribed to the employees of petitioner
airline; and Dr. Pablo's luggage was eventually returned to her, belatedly, it is true, but without appreciable
damage. The fact is, nevertheless, that some special species of injury was caused to Dr. Pablo because
petitioner ALITALIA misplaced her baggage and failed to deliver it to her at the time appointed — a breach of
its contract of carriage, to be sure — with the result that she was unable to read the paper and make the
scientific presentation (consisting of slides, autoradiograms or films, tables and tabulations) that she had
painstakingly labored over, at the prestigious international conference, to attend which she had traveled
hundreds of miles, to her chagrin and embarrassment and the disappointment and annoyance of the
organizers. She felt, not unreasonably, that the invitation for her to participate at the conference, extended by
the Joint FAO/IAEA Division of Atomic Energy in Food and Agriculture of the United Nations, was a singular
honor not only to herself, but to the University of the Philippines and the country as well, an opportunity to
make some sort of impression among her colleagues in that field of scientific activity. The opportunity to claim
this honor or distinction was irretrievably lost to her because of Alitalia's breach of its contract.
Apart from this, there can be no doubt that Dr. Pablo underwent profound distress and anxiety, which
gradually turned to panic and finally despair, from the time she learned that her suitcases were missing up to
the time when, having gone to Rome, she finally realized that she would no longer be able to take part in the
conference. As she herself put it, she "was really shocked and distraught and confused."
Certainly, the compensation for the injury suffered by Dr. Pablo cannot under the circumstances be restricted
to that prescribed by the Warsaw Convention for delay in the transport of baggage.
She is not, of course, entitled to be compensated for loss or damage to her luggage. As already mentioned,
her baggage was ultimately delivered to her in Manila, tardily but safely. She is however entitled to nominal
damages — which, as the law says, is adjudicated in order that a right of the plaintiff, which has been violated
or invaded by the defendant, may be vindicated and recognized, and not for the purpose of indemnifying the
plaintiff for any loss suffered — and this Court agrees that the respondent Court of Appeals correctly set the
amount thereof at P40,000.00. As to the purely technical argument that the award to her of such nominal
damages is precluded by her omission to include a specific claim therefor in her complaint, it suffices to draw
attention to her general prayer, following her plea for moral and exemplary damages and attorney's fees, "for
such other and further just and equitable relief in the premises," which certainly is broad enough to
comprehend an application as well for nominal damages. Besides, petitioner should have realized that the
explicit assertion, and proof, that Dr. Pablo's right had been violated or invaded by it — absent any claim for
actual or compensatory damages, the prayer thereof having been voluntarily deleted by Dr. Pablo upon the
return to her of her baggage — necessarily raised the issue of nominal damages. : rd
This Court also agrees that respondent Court of Appeals correctly awarded attorney's fees to Dr. Pablo, and
the amount of P5,000.00 set by it is reasonable in the premises. The law authorizes recovery of attorney's
fees inter alia where, as here, "the defendant's act or omission has compelled the plaintiff to litigate with third
persons or to incur expenses to protect his interest,"  34 or "where the court deems it just and equitable."  35
WHEREFORE, no error being perceived in the challenged decision of the Court of Appeals, it appearing on
the contrary to be entirely in accord with the facts and the law, said decision is hereby AFFIRMED, with costs
against the petitioner.
SO ORDERED.
G.R. No. 171092               March 15, 2010
EDNA DIAGO LHUILLIER, Petitioner, vs. BRITISH AIRWAYS, Respondent.
DECISION
DEL CASTILLO, J.:
Jurisdictio est potestas de publico introducta cum necessitate juris dicendi. Jurisdiction is a power introduced
for the public good, on account of the necessity of dispensing justice.1
Factual Antecedents
On April 28, 2005, petitioner Edna Diago Lhuillier filed a Complaint 2 for damages against respondent British
Airways before the Regional Trial Court (RTC) of Makati City. She alleged that on February 28, 2005, she took
respondent’s flight 548 from London, United Kingdom to Rome, Italy. Once on board, she allegedly requested
Julian Halliday (Halliday), one of the respondent’s flight attendants, to assist her in placing her hand-carried
luggage in the overhead bin. However, Halliday allegedly refused to help and assist her, and even
sarcastically remarked that "If I were to help all 300 passengers in this flight, I would have a broken back!"
Petitioner further alleged that when the plane was about to land in Rome, Italy, another flight attendant,
Nickolas Kerrigan (Kerrigan), singled her out from among all the passengers in the business class section to
lecture on plane safety. Allegedly, Kerrigan made her appear to the other passengers to be ignorant,
uneducated, stupid, and in need of lecturing on the safety rules and regulations of the plane. Affronted,
petitioner assured Kerrigan that she knew the plane’s safety regulations being a frequent traveler. Thereupon,
Kerrigan allegedly thrust his face a mere few centimeters away from that of the petitioner and menacingly told
her that "We don’t like your attitude."
Upon arrival in Rome, petitioner complained to respondent’s ground manager and demanded an apology.
However, the latter declared that the flight stewards were "only doing their job."
Thus, petitioner filed the complaint for damages, praying that respondent be ordered to pay ₱5 million as
moral damages, ₱2 million as nominal damages, ₱1 million as exemplary damages, ₱300,000.00 as
attorney’s fees, ₱200,000.00 as litigation expenses, and cost of the suit.
On May 16, 2005, summons, together with a copy of the complaint, was served on the respondent through
Violeta Echevarria, General Manager of Euro-Philippine Airline Services, Inc.3
On May 30, 2005, respondent, by way of special appearance through counsel, filed a Motion to Dismiss 4 on
grounds of lack of jurisdiction over the case and over the person of the respondent. Respondent alleged that
only the courts of London, United Kingdom or Rome, Italy, have jurisdiction over the complaint for damages
pursuant to the Warsaw Convention,5 Article 28(1) of which provides:
An action for damages must be brought at the option of the plaintiff, either before the court of domicile of the
carrier or his principal place of business, or where he has a place of business through which the contract has
been made, or before the court of the place of destination.
Thus, since a) respondent is domiciled in London; b) respondent’s principal place of business is in London; c)
petitioner bought her ticket in Italy (through Jeepney Travel S.A.S, in Rome);6 and d) Rome, Italy is petitioner’s
place of destination, then it follows that the complaint should only be filed in the proper courts of London,
United Kingdom or Rome, Italy.
Likewise, it was alleged that the case must be dismissed for lack of jurisdiction over the person of the
respondent because the summons was erroneously served on Euro-Philippine Airline Services, Inc. which is
not its resident agent in the Philippines.
On June 3, 2005, the trial court issued an Order requiring herein petitioner to file her Comment/Opposition on
the Motion to Dismiss within 10 days from notice thereof, and for respondent to file a Reply thereon.7 Instead
of filing a Comment/Opposition, petitioner filed on June 27, 2005, an Urgent Ex-Parte Motion to Admit Formal
Amendment to the Complaint and Issuance of Alias Summons.8 Petitioner alleged that upon verification with
the Securities and Exchange Commission, she found out that the resident agent of respondent in the
Philippines is Alonzo Q. Ancheta. Subsequently, on September 9, 2005, petitioner filed a Motion to Resolve
Pending Incident and Opposition to Motion to Dismiss.9
Ruling of the Regional Trial Court
On October 14, 2005, the RTC of Makati City, Branch 132, issued an Order 10 granting respondent’s Motion to
Dismiss. It ruled that:
The Court sympathizes with the alleged ill-treatment suffered by the plaintiff. However, our Courts have to
apply the principles of international law, and are bound by treaty stipulations entered into by the Philippines
which form part of the law of the land. One of this is the Warsaw Convention. Being a signatory thereto, the
Philippines adheres to its stipulations and is bound by its provisions including the place where actions
involving damages to plaintiff is to be instituted, as provided for under Article 28(1) thereof. The Court finds no
justifiable reason to deviate from the indicated limitations as it will only run counter to the provisions of the
Warsaw Convention. Said adherence is in consonance with the comity of nations and deviation from it can
only be effected through proper denunciation as enunciated in the Santos case (ibid). Since the Philippines is
not the place of domicile of the defendant nor is it the principal place of business, our courts are thus divested
of jurisdiction over cases for damages. Neither was plaintiff’s ticket issued in this country nor was her
destination Manila but Rome in Italy. It bears stressing however, that referral to the court of proper jurisdiction
does not constitute constructive denial of plaintiff’s right to have access to our courts since the Warsaw
Convention itself provided for jurisdiction over cases arising from international transportation. Said treaty
stipulations must be complied with in good faith following the time honored principle of pacta sunt servanda.
The resolution of the propriety of service of summons is rendered moot by the Court’s want of jurisdiction over
the instant case.
WHEREFORE, premises considered, the present Motion to Dismiss is hereby GRANTED and this case is
hereby ordered DISMISSED.
Petitioner filed a Motion for Reconsideration but the motion was denied in an Order11 dated January 4, 2006.
Petitioner now comes directly before us on a Petition for Review on Certiorari on pure questions of law, raising
the following issues:
Issues
I. WHETHER X X X PHILIPPINE COURTs HAVE JURISDICTION OVER A TORTIOUS CONDUCT
COMMITTED AGAINST A FILIPINO CITIZEN AND RESIDENT BY AIRLINE PERSONNEL OF A FOREIGN
CARRIER TRAVELLING BEYOND THE TERRITORIAL LIMIT OF ANY FOREIGN COUNTRY; AND THUS IS
OUTSIDE THE AMBIT OF THE WARSAW CONVENTION.
II. WHETHER x x x RESPONDENT AIR CARRIER OF PASSENGERS, IN FILING ITS MOTION TO DISMISS
BASED ON LACK OF JURISDICTION OVER THE SUBJECT MATTER OF THE CASE AND OVER ITS
PERSON MAY BE DEEMED AS HAVING IN FACT AND IN LAW SUBMITTED ITSELF TO THE
JURISDICTION OF THE LOWER COURT, ESPECIALLY SO, WHEN THE VERY LAWYER ARGUING FOR
IT IS HIMSELF THE RESIDENT AGENT OF THE CARRIER.
Petitioner’s Arguments
Petitioner argues that her cause of action arose not from the contract of carriage, but from the tortious conduct
committed by airline personnel of respondent in violation of the provisions of the Civil Code on Human
Relations. Since her cause of action was not predicated on the contract of carriage, petitioner asserts that she
has the option to pursue this case in this jurisdiction pursuant to Philippine laws.
Respondent’s Arguments
In contrast, respondent maintains that petitioner’s claim for damages fell within the ambit of Article 28(1) of the
Warsaw Convention. As such, the same can only be filed before the courts of London, United Kingdom or
Rome, Italy.
Our Ruling
The petition is without merit.
The Warsaw Convention has the force and effect of law in this country.
It is settled that the Warsaw Convention has the force and effect of law in this country. In Santos III v.
Northwest Orient Airlines,12 we held that:
The Republic of the Philippines is a party to the Convention for the Unification of Certain Rules Relating to
International Transportation by Air, otherwise known as the Warsaw Convention. It took effect on February 13,
1933. The Convention was concurred in by the Senate, through its Resolution No. 19, on May 16, 1950. The
Philippine instrument of accession was signed by President Elpidio Quirino on October 13, 1950, and was
deposited with the Polish government on November 9, 1950. The Convention became applicable to the
Philippines on February 9, 1951. On September 23, 1955, President Ramon Magsaysay issued Proclamation
No. 201, declaring our formal adherence thereto, "to the end that the same and every article and clause
thereof may be observed and fulfilled in good faith by the Republic of the Philippines and the citizens thereof."
The Convention is thus a treaty commitment voluntarily assumed by the Philippine government and, as such,
has the force and effect of law in this country.13
The Warsaw Convention applies because the air travel, where the alleged tortious conduct occurred, was
between the United Kingdom and Italy, which are both signatories to the Warsaw Convention.
Article 1 of the Warsaw Convention provides:
1. This Convention applies to all international carriage of persons, luggage or goods performed by
aircraft for reward. It applies equally to gratuitous carriage by aircraft performed by an air transport
undertaking.
2. For the purposes of this Convention the expression "international carriage" means any carriage in
which, according to the contract made by the parties, the place of departure and the place of
destination, whether or not there be a break in the carriage or a transhipment, are situated either
within the territories of two High Contracting Parties, or within the territory of a single High
Contracting Party, if there is an agreed stopping place within a territory subject to the sovereignty,
suzerainty, mandate or authority of another Power, even though that Power is not a party to this
Convention. A carriage without such an agreed stopping place between territories subject to the
sovereignty, suzerainty, mandate or authority of the same High Contracting Party is not deemed to
be international for the purposes of this Convention. (Emphasis supplied)
Thus, when the place of departure and the place of destination in a contract of carriage are situated within the
territories of two High Contracting Parties, said carriage is deemed an "international carriage". The High
Contracting Parties referred to herein were the signatories to the Warsaw Convention and those which
subsequently adhered to it.14
In the case at bench, petitioner’s place of departure was London, United Kingdom while her place of
destination was Rome, Italy.15 Both the United Kingdom16 and Italy17 signed and ratified the Warsaw
Convention. As such, the transport of the petitioner is deemed to be an "international carriage" within the
contemplation of the Warsaw Convention.
Since the Warsaw Convention applies in the instant case, then the jurisdiction over the subject matter of the
action is governed by the provisions of the Warsaw Convention.
Under Article 28(1) of the Warsaw Convention, the plaintiff may bring the action for damages before –
1. the court where the carrier is domiciled;
2. the court where the carrier has its principal place of business;
3. the court where the carrier has an establishment by which the contract has been made; or
4. the court of the place of destination.
In this case, it is not disputed that respondent is a British corporation domiciled in London, United Kingdom
with London as its principal place of business. Hence, under the first and second jurisdictional rules, the
petitioner may bring her case before the courts of London in the United Kingdom. In the passenger ticket and
baggage check presented by both the petitioner and respondent, it appears that the ticket was issued in
Rome, Italy. Consequently, under the third jurisdictional rule, the petitioner has the option to bring her case
before the courts of Rome in Italy. Finally, both the petitioner and respondent aver that the place of destination
is Rome, Italy, which is properly designated given the routing presented in the said passenger ticket and
baggage check. Accordingly, petitioner may bring her action before the courts of Rome, Italy. We thus find that
the RTC of Makati correctly ruled that it does not have jurisdiction over the case filed by the petitioner.
Santos III v. Northwest Orient Airlines18 applies in this case.
Petitioner contends that Santos III v. Northwest Orient Airlines 19 cited by the trial court is inapplicable to the
present controversy since the facts thereof are not similar with the instant case.
We are not persuaded.
In Santos III v. Northwest Orient Airlines,20 Augusto Santos III, a resident of the Philippines, purchased a ticket
from Northwest Orient Airlines in San Francisco, for transport between San Francisco and Manila via Tokyo
and back to San Francisco. He was wait-listed in the Tokyo to Manila segment of his ticket, despite his prior
reservation. Contending that Northwest Orient Airlines acted in bad faith and discriminated against him when it
canceled his confirmed reservation and gave his seat to someone who had no better right to it, Augusto
Santos III sued the carrier for damages before the RTC. Northwest Orient Airlines moved to dismiss the
complaint on ground of lack of jurisdiction citing Article 28(1) of the Warsaw Convention. The trial court
granted the motion which ruling was affirmed by the Court of Appeals. When the case was brought before us,
we denied the petition holding that under Article 28(1) of the Warsaw Convention, Augusto Santos III must
prosecute his claim in the United States, that place being the (1) domicile of the Northwest Orient Airlines; (2)
principal office of the carrier; (3) place where contract had been made (San Francisco); and (4) place of
destination (San Francisco).21
We further held that Article 28(1) of the Warsaw Convention is jurisdictional in character. Thus:
A number of reasons tends to support the characterization of Article 28(1) as a jurisdiction and not a venue
provision. First, the wording of Article 32, which indicates the places where the action for damages "must" be
brought, underscores the mandatory nature of Article 28(1). Second, this characterization is consistent with
one of the objectives of the Convention, which is to "regulate in a uniform manner the conditions of
international transportation by air." Third, the Convention does not contain any provision prescribing rules of
jurisdiction other than Article 28(1), which means that the phrase "rules as to jurisdiction" used in Article 32
must refer only to Article 28(1). In fact, the last sentence of Article 32 specifically deals with the exclusive
enumeration in Article 28(1) as "jurisdictions," which, as such, cannot be left to the will of the parties
regardless of the time when the damage occurred.
xxxx
In other words, where the matter is governed by the Warsaw Convention, jurisdiction takes on a dual concept.
Jurisdiction in the international sense must be established in accordance with Article 28(1) of the Warsaw
Convention, following which the jurisdiction of a particular court must be established pursuant to the applicable
domestic law. Only after the question of which court has jurisdiction is determined will the issue of venue be
taken up. This second question shall be governed by the law of the court to which the case is submitted.22
Contrary to the contention of petitioner, Santos III v. Northwest Orient Airlines23 is analogous to the instant
case because (1) the domicile of respondent is London, United Kingdom;24 (2) the principal office of
respondent airline is likewise in London, United Kingdom;25 (3) the ticket was purchased in Rome, Italy; 26 and
(4) the place of destination is Rome, Italy.27 In addition, petitioner based her complaint on Article 2176 28 of the
Civil Code on quasi-delict and Articles 1929 and 2130 of the Civil Code on Human Relations. In Santos III v.
Northwest Orient Airlines,31 Augusto Santos III similarly posited that Article 28 (1) of the Warsaw Convention
did not apply if the action is based on tort. Hence, contrary to the contention of the petitioner, the factual
setting of Santos III v. Northwest Orient Airlines32 and the instant case are parallel on the material points.
Tortious conduct as ground for the petitioner’s complaint is within the purview of the Warsaw Convention.
Petitioner contends that in Santos III v. Northwest Orient Airlines, 33 the cause of action was based on a breach
of contract while her cause of action arose from the tortious conduct of the airline personnel and violation of
the Civil Code provisions on Human Relations.34 In addition, she claims that our pronouncement in Santos III
v. Northwest Orient Airlines35 that "the allegation of willful misconduct resulting in a tort is insufficient to
exclude the case from the comprehension of the Warsaw Convention," is more of an obiter dictum rather than
the ratio decidendi.36 She maintains that the fact that said acts occurred aboard a plane is merely incidental, if
not irrelevant.37
We disagree with the position taken by the petitioner. Black defines obiter dictum as "an opinion entirely
unnecessary for the decision of the case" and thus "are not binding as precedent." 38 In Santos III v. Northwest
Orient Airlines,39 Augusto Santos III categorically put in issue the applicability of Article 28(1) of the Warsaw
Convention if the action is based on tort.
In the said case, we held that the allegation of willful misconduct resulting in a tort is insufficient to exclude the
case from the realm of the Warsaw Convention. In fact, our ruling that a cause of action based on tort did not
bring the case outside the sphere of the Warsaw Convention was our ratio decidendi in disposing of the
specific issue presented by Augusto Santos III. Clearly, the contention of the herein petitioner that the said
ruling is an obiter dictum is without basis.
Relevant to this particular issue is the case of Carey v. United Airlines,40 where the passenger filed an action
against the airline arising from an incident involving the former and the airline’s flight attendant during an
international flight resulting to a heated exchange which included insults and profanity. The United States
Court of Appeals (9th Circuit) held that the "passenger's action against the airline carrier arising from alleged
confrontational incident between passenger and flight attendant on international flight was governed
exclusively by the Warsaw Convention, even though the incident allegedly involved intentional misconduct by
the flight attendant."41
In Bloom v. Alaska Airlines,42 the passenger brought nine causes of action against the airline in the state court,
arising from a confrontation with the flight attendant during an international flight to Mexico. The United States
Court of Appeals (9th Circuit) held that the "Warsaw Convention governs actions arising from international air
travel and provides the exclusive remedy for conduct which falls within its provisions." It further held that the
said Convention "created no exception for an injury suffered as a result of intentional conduct" 43 which in that
case involved a claim for intentional infliction of emotional distress.
It is thus settled that allegations of tortious conduct committed against an airline passenger during the course
of the international carriage do not bring the case outside the ambit of the Warsaw Convention.
Respondent, in seeking remedies from the trial court through special appearance of counsel, is not deemed to
have voluntarily submitted itself to the jurisdiction of the trial court.
Petitioner argues that respondent has effectively submitted itself to the jurisdiction of the trial court when the
latter stated in its Comment/Opposition to the Motion for Reconsideration that "Defendant [is at a loss] x x x
how the plaintiff arrived at her erroneous impression that it is/was Euro-Philippines Airlines Services, Inc. that
has been making a special appearance since x x x British Airways x x x has been clearly specifying in all the
pleadings that it has filed with this Honorable Court that it is the one making a special appearance."44
In refuting the contention of petitioner, respondent cited La Naval Drug Corporation v. Court of
Appeals45 where we held that even if a party "challenges the jurisdiction of the court over his person, as by
reason of absence or defective service of summons, and he also invokes other grounds for the dismissal of
the action under Rule 16, he is not deemed to be in estoppel or to have waived his objection to the jurisdiction
over his person."46
This issue has been squarely passed upon in the recent case of Garcia v. Sandiganbayan, 47 where we
reiterated our ruling in La Naval Drug Corporation v. Court of Appeals48 and elucidated thus:
Special Appearance to Question a Court’s Jurisdiction Is Not
Voluntary Appearance
The second sentence of Sec. 20, Rule 14 of the Revised Rules of Civil Procedure clearly provides:
Sec. 20. Voluntary appearance. – The defendant’s voluntary appearance in the action shall be equivalent to
service of summons. The inclusion in a motion to dismiss of other grounds aside from lack of jurisdiction over
the person of the defendant shall not be deemed a voluntary appearance.
Thus, a defendant who files a motion to dismiss, assailing the jurisdiction of the court over his person, together
with other grounds raised therein, is not deemed to have appeared voluntarily before the court. What the rule
on voluntary appearance – the first sentence of the above-quoted rule – means is that the voluntary
appearance of the defendant in court is without qualification, in which case he is deemed to have waived his
defense of lack of jurisdiction over his person due to improper service of summons.
The pleadings filed by petitioner in the subject forfeiture cases, however, do not show that she voluntarily
appeared without qualification. Petitioner filed the following pleadings in Forfeiture I: (a) motion to dismiss; (b)
motion for reconsideration and/or to admit answer; (c) second motion for reconsideration; (d) motion to
consolidate forfeiture case with plunder case; and (e) motion to dismiss and/or to quash Forfeiture I. And in
Forfeiture II: (a) motion to dismiss and/or to quash Forfeiture II; and (b) motion for partial reconsideration.
The foregoing pleadings, particularly the motions to dismiss, were filed by petitioner solely for special
appearance with the purpose of challenging the jurisdiction of the SB over her person and that of her three
children. Petitioner asserts therein that SB did not acquire jurisdiction over her person and of her three
children for lack of valid service of summons through improvident substituted service of summons in both
Forfeiture I and Forfeiture II. This stance the petitioner never abandoned when she filed her motions for
reconsideration, even with a prayer to admit their attached Answer Ex Abundante Ad Cautelam dated January
22, 2005 setting forth affirmative defenses with a claim for damages. And the other subsequent pleadings,
likewise, did not abandon her stance and defense of lack of jurisdiction due to improper substituted services of
summons in the forfeiture cases. Evidently, from the foregoing Sec. 20, Rule 14 of the 1997 Revised Rules on
Civil Procedure, petitioner and her sons did not voluntarily appear before the SB constitutive of or equivalent
to service of summons.
Moreover, the leading La Naval Drug Corp. v. Court of Appeals applies to the instant case. Said case
elucidates the current view in our jurisdiction that a special appearance before the court––challenging its
jurisdiction over the person through a motion to dismiss even if the movant invokes other grounds––is not
tantamount to estoppel or a waiver by the movant of his objection to jurisdiction over his person; and such is
not constitutive of a voluntary submission to the jurisdiction of the court.
1avvphi1
Thus, it cannot be said that petitioner and her three children voluntarily appeared before the SB to cure the
defective substituted services of summons. They are, therefore, not estopped from questioning the jurisdiction
of the SB over their persons nor are they deemed to have waived such defense of lack of jurisdiction.
Consequently, there being no valid substituted services of summons made, the SB did not acquire jurisdiction
over the persons of petitioner and her children. And perforce, the proceedings in the subject forfeiture cases,
insofar as petitioner and her three children are concerned, are null and void for lack of jurisdiction. (Emphasis Manila to SQ 081 25-9-84 1530 OK
supplied) Singapore

In this case, the special appearance of the counsel of respondent in filing the Motion to Dismiss and other Singapore to LH 695 25-9-84 2200 OK
pleadings before the trial court cannot be deemed to be voluntary submission to the jurisdiction of the said trial Bombay
court. We hence disagree with the contention of the petitioner and rule that there was no voluntary
appearance before the trial court that could constitute estoppel or a waiver of respondent’s objection to Bombay to KQ 203 26-9-84 0215 OK
jurisdiction over its person. Nairobi

WHEREFORE, the petition is DENIED. The October 14, 2005 Order of the Regional Trial Court of Makati City, Nairobi to QM 335 26-9-84 1395 OK
Branch 132, dismissing the complaint for lack of jurisdiction, is AFFIRMED. Lilongwe

SO ORDERED. Lilongwe to QM 031 26-9-84 1600 OK

G.R. No. 83612 November 24, 1994
LUFTHANSA GERMAN AIRLINES, petitioner, vs. COURT OF APPEALS and TIRSO V. ANTIPORDA,
SR., respondents.
Quisumbing, Torres & Evangelista for petitioner. Quirante and Associates Law Office for private respondent.
ROMERO, J.:
In this petition for review on certiorari, the Court is confronted with the issue of whether or not petitioner
Lufthansa German Airlines which issued a confirmed Lufthansa ticket to private respondent Antiporda
covering a five-leg trip abroad different airlines should be held liable for damages occasioned by the
"bumping-off" of said private respondent Antiporda by Air Kenya, one of the airlines contracted to carry him to
a particular destination of the five-leg trip.
Tirso V. Antiporda, Sr. was an associate director of the Central Bank of the Philippines and a
registered consultant of the Asian Development Bank, the World Bank and the UNDP. He was,
contracted by Sycip, Gorres, Velayo & Co. (SGV) to be the institutional financial specialist for the
agricultural credit institution project of the Investment and Development Bank of Malawi in Africa.
Blantyre
Thus, on September 25, 1984, Antiporda took the Lufthansa flight to Singapore from where he proceeded to
Bombay on board the same airline. He arrived in Bombay as scheduled and waited at the transit area of the
airport for his connecting flight to Nairobi which was, per schedule given him by Lufthansa, to leave Bombay in
the morning of September 26, 1984. Finding no representative of Lufthansa waiting for him at the gate,
Antiporda asked the duty officer of Air India how he could get in touch with Lufthansa. He was told to call up
Lufthansa which informed him that somebody would attend to him shortly. Ten minutes later, Gerard Matias,
Lufthansa's traffic officer, arrived, asked for Antiporda's ticket and told him to just sit down and wait. Matias
returned with one Leslie Benent, duty officer of Lufthansa, who informed Antiporda that his seat in Air Kenya
Flight 203 to Nairobi had been given to a very important person of Bombay who was attending a religious
function in Nairobi. Antiporda protested, stressing that he had an important professional engagement in
Blantyre, Malawi in the afternoon of September 26, 1984. He requested that the situation be remedied but Air
Kenya Flight 203 left for Nairobi without him on board. Stranded in Bombay, Antiporda was booked for Nairobi
via Addis Ababa only on September 27, 1984. He finally arrived in Blantyre at 9:00 o'clock in the evening of
September 28, 1984, more than a couple of days late for his appointment with people from the institution he
was to work with in Malawi.
Consequently, on January 8, 1985, Antiporda's counsel wrote the general manager of Lufthansa in Manila
demanding P1,000,000 in damages for the airline's "malicious, wanton, disregard of the contract of
carriage."   In reply, Lufthansa general manager Hagen Keilich assured Antiporda that the matter would be
2

According to the letter of August 30, 1984 addressed to Antiporda from J.F. Singson of SGV, he investigated.
would render his services to the Malawi bank as an independent contractor for which he would be
paid US$9,167 for a 50-day period commencing sometime in September 1984. For the engagement, Apparently getting no positive action from Lufthansa, on January 21, 1985, Antiporda filed with the Regional
Antiporda would be provided one round-trip economy ticket from Manila to Blantyre and back with a Trial Court of Quezon City a complaint against Lufthansa which was docketed as Civil Case No. Q-43810.
maximum travel time of four days per round-trip and, in addition, a travel allowance of $50 per day, a
travel insurance coverage of P100,000 and major hospitalization with AFIA and an accident
insurance coverage of P150,000.  On September 17, 1984, Lufthansa, through SGV, issued ticket
1 The lower court,   guided by the Supreme Court ruling in KLM Dutch Airlines v. Court of Appeals, et al.,   found
3 4

No. 3477712678 for Antiporda's confirmed flights to Malawi, Africa. The ticket particularized his that Lufthansa breached the contract to transport Antiporda from Manila to Blantyre on a trip of five legs. It
itinerary as follows: said:

Carrier Flight Date Time Status The threshold issue that confronts this Court is:
 Was there a breach of obligation by the defendant in failing to transport the plaintiff from
Manila to Blantyre, Malawi, Africa?
The defendant admits the issuance and validity of Ticket No. 3477712678 (Exh. B).
However, it denies its obligation to transport the plaintiff to his point of destination at
Blantyre, Malawi, Africa. Defendant claims that it was obligated to transport the plaintiff only
up to Bombay.
This case is one of a contract of carriage. And the ticket issued by the defendant to the
plaintiff is the written agreement between the parties herein. Ticket No. 3477712678
particularizes the itinerary of the plaintiff . . .
xxx xxx xxx
From the ticket, therefore, it is indubitably clear that it was the duty and responsibility of the
defendant Lufthansa to transport the plaintiff from Manila to Blantyre, on a trip of five legs.
The posture taken by the defendant that it was Air Kenya's, not Lufthansa's, liability to
transport plaintiff from Bombay to Malawi, is inacceptable. The plaintiff dealt exclusively with
the defendant Lufthansa which issued to him the ticket for his entire trip and which in effect
guaranteed to the plaintiff that he would have sure space in Air Kenya's flight to Nairobi.
Plaintiff, under that assurance of the defendant, naturally, had the right to expect that his
ticket would be honored by Air Kenya, to which, in the legal sense, Lufthansa had endorsed
and in effect guaranteed the performance of its principal engagement to carry out plaintiff's
scheduled itinerary previously and mutually agreed upon by the parties. Defendant itself
admitted that the flight from Manila, Singapore, Bombay, Nairobi, Lilongwe, Blantyre,
Malawi, were all confirmed with the stamped letters "OK" thereon. In short, after issuing a
confirmed ticket from Manila to Malawi and receiv(ing) payment from the plaintiff for such
one whole trip, how can the defendant now deny its contractual obligation by alleging that its
responsibility ceased at the Bombay Airport?
The contract of air transportation was exclusively between the plaintiff Antiporda and the
defendant Lufthansa, the latter merely endorsing its performance to Air Kenya, as its
subcontractor or agent. The fourth paragraph of the "Conditions of Contracts" of the ticket
(Exh. B) issued by Lufthansa to plaintiff indubitably shows that the contract was one of
continuous air transportation from Manila to Blantyre, Malawi.
4. . . . carriage to be performed hereunder by several successive carriers
is regarded as a single operation.
This condition embodied in the ticket issued to plaintiff is diametrically opposed to the
defense theory that Lufthansa's liability is only limited up to Bombay.
Pursuant to the above reasoning, the lower court held that Lufthansa cannot limit its liability as a mere ticket
issuing agent for other airlines and only to untoward occurrences on its own line.
The lower court added that under the pool arrangement of the International Air Transport Association (IATA),
of which Lufthansa and Air Kenya are members, member airlines are agents of each other in the issuance of
tickets and, therefore, in accordance with Ortigas v. Lufthansa,  an airline company is considered bound by the
5
mistakes committed by another member of IATA which, in behalf of the former, had confirmed a passenger's
reservation for accommodation.
In justifying its award of moral and exemplary damages, the lower court emphasized that the breach of
contract was "aggravated by the discourteous and highly arbitrary conduct of Gerard Matias, an official of
petitioner Lufthansa in Bombay." Its factual findings on the matter are the following:
. . . . Bumped off from his connecting flight to Nairobi and stranded in the Bombay Airport for
32 hours, when plaintiff insisted on taking his scheduled flight to Nairobi, Gerard Matias got
angry and threw the ticket and passport on plaintiff's lap and was ordered to go to the
basement with his heavy luggages for no reason at all. It was a difficult task for the plaintiff
to carry three luggages and yet Gerard Matias did not even offer to help him. Plaintiff
requested accommodation but Matias ignored it and just left. Not even Lufthansa office in
Bombay, after learning plaintiff's being stranded in Bombay and his accommodation
problem, provided any relief to plaintiff's sordid situation. Plaintiff had to stay in the transit
area and could not sleep for fear that his luggages might be lost. Everytime he went to the
toilet, he had to drag with him his luggages. He tried to eat the high-seasoned food available
at the airport but developed stomach trouble. It was indeed a pathetic sight that the plaintiff,
an official of the Central Bank, a multi-awarded institutional expert, tasked to perform
consultancy work in a World Bank funded agricultural bank project in Malawi instead found
himself stranded in a foreign land where nobody was expected to help him in his
predicament except the defendant, who displayed utter lack of concern of its obligation to
the plaintiff and left plaintiff alone in his misery at the Bombay airport.
Citing Air France v. Carrascoso,   the lower court ruled that passengers have a right to be treated with
6
kindness, respect, courtesy and consideration by the carrier's employees apart from their right to be protected
against personal misconduct, injurious language, indignities and abuses from such employees.
Consequently, the trial court ordered Lufthansa to pay Antiporda the following:
(a) the amount of P300,000.00 as moral damages;
(b) the amount of P200,000.00 as exemplary damages; and
(c) the amount of P50,000.00 as reasonable attorney's fees.
With costs against the defendant.
Lufthansa elevated the case to the Court of Appeals arguing that it cannot be held liable for the acts
committed by Air Kenya on the basis of the following:
 (a) it merely acted as a ticket-issuing agent in behalf of Air Kenya; consequently the contract
of carriage entered into is between respondent Antiporda and Air Kenya, to the exclusion of
petitioner Lufthansa;
(b) under sections (1) and (2) Article 30 of the Warsaw Convention, an airline carrier is liable
only to untoward occurrences on its own line;
(c) the award of moral and exemplary damages in addition to attorney's fees by the trial
court is without basis in fact and in law.
The Court of Appeals not convinced with Lufthansa's appeal, affirmed the decision on the trial court sought to
be reviewed.
Explained the Court of Appeals: although the contract of carriage was to be performed by several air carriers,
the same is to be treated as a single operation conducted by Lufthansa because Antiporda dealt exclusively
with it which issued him a Lufthansa ticket for the entire trip. By issuing a confirmed ticket, Lufthansa in effect
guaranteed Antiporda a sure seat with Air Kenya. Private respondent Antiporda, maintained the Court of
Appeals, had the right to expect that his ticket would be honored by Air Kenya which, in the legal sense,
Lufthansa had endorsed and, in effect, guaranteed the performance of its principal engagement to carry out
his five-leg trip.
The appellate court also ruled that Lufthansa cannot rely on Sections (1) and (2), Article 30 of the Warsaw
Convention   because the provisions thereof are not applicable under the circumstances of the case.
7
Sections (1) and (2), Article 30 of the Warsaw Convention provide:
Art. 30 (1). In the case of transportation to be performed by various successive carriers and
falling within the definition set out in the third paragraph of Article I, each carrier who
accepts passengers, baggage, or goods shall be subject to the rules set out in the
convention, and shall be deemed to be one of the contracting parties to the contract of
transportation insofar as the contract deals with that part of the transportation which is
performed under his supervision.
(2) In the case of transportation of this nature, the passenger or his representative can take
action only against the carrier who performed the transportation during which the accident
or the delay occurred, save in the case where, by express agreement, the first carrier has
assumed liability for the whole journey. (Emphasis supplied).
According to the Court of Appeals, Antiporda's cause of action is not premised on the occurrence of an
accident or delay as contemplated under Section 2 of said Article but on Air Kenya's refusal to transport him in
order to accommodate another. To support this ruling, the Court of Appeals cited the Supreme Court ruling
in KLM Royal Dutch Airlines v. Court of Appeals,   which held, inter alia, that:
8
1. The applicability insisted upon by the KLM of Article 30 of the Warsaw Convention cannot
be sustained. That article presupposes the occurrence of either an accident or a delay,
neither of which took place at the Barcelona airport; what is here manifest, instead, is that
the Aer Lingus, through its manager there, refused to transport the respondents to their
planned and contracted destination.
The Court of Appeals concluded that Lufthansa cannot, thus, invoke Sections (1) and (2), Article 30 of the
Warsaw Convention to evade liability.
Failing to obtain a favorable decision, Lufthansa filed this petition for review on certiorari anchored on the
following arguments:
1. The respondent court erred as a matter of law in refusing to apply the Warsaw
Convention to the instant case.
2. Respondent court's ruling that Lufthansa had deceived private respondent has no factual
or legal basis.
3. The respondent court erred as a matter of law in affirming the trial court's award of moral
damages in the face of this Court's rulings concerning moral damages in cases of breach of
contract.
4. The respondent court erred as a matter of law in affirming the trial court's award of
exemplary damages for lack of legal or factual basis therefor.
The arguments propounded by petitioner Lufthansa cannot suffice to reverse the appellate court's decision as
prayed for. Lufthansa raised four assignments of error but the focal point at issue has been defined by us at
the inception of this ponencia.
Lufthansa maintains that its liability to any passenger is limited to occurrences in its own line, and, thus, in the
case at bench, its liability to Antiporda is limited to the extent that it had transported him from Manila to
Singapore and from Singapore to Bombay; that therefrom, responsibility for the performance of the contract of
carriage is assumed by the succeeding carriers tasked to transport him for the remaining leg of his trip
because at that stage, its contract of carriage with Antiporda ceases, with Lufthansa acting, no longer as the
principal in the contract of carriage, but merely as a ticket-issuing agent for the other carriers.
In further advancing this line of defense, Lufthansa invoked Section 2, Article 30 of the Warsaw
Convention  which expressly stipulates that in cases where the transportation of passengers or goods is
9
performed by various successive carriers, the passenger can take action only against the carrier which
performed the transportation, during which the accident or delay occurred. Lufthansa further advanced the
theory that this provision of the Warsaw Convention is applicable to the present case, contrary to the decision
of the Court of Appeals which relied on the Supreme Court ruling in KLM Royal Dutch Lines.   For Lufthansa,
10
"bumping-off" is considered delay since delay would inevitably result therefrom. It implored this Court to re-
examine our ruling in KLM and take heed of jurisprudence   in the U.S. where "delay," unlike in our ruling in
11
KLM, contemplates the instance of "bumping-off." In KLM, we held that the term "delay" does not encompass
the instance of "bumping-off," the latter having been defined as refusal to carry or transport a passenger.
On his part, private respondent Antiporda insists that he entered with Lufthansa an exclusive contract of
carriage, the nature of which is a continuous carriage by air from Manila to Blantyre Malawi; that it did not
enter into a series of independent contracts with the carriers that transported him for the remaining leg of his
trip.
The basis for such claim is well-founded. As ruled by the trial court, with the Court of Appeals concurring
favorably, Antiporda was issued a confirmed Lufthansa ticket all throughout the five-leg trip. The fourth
paragraph of the "Conditions of Contract" stipulated in the ticket indubitably showed that the contract of
carriage was considered as one of continuous air transportation from Manila to Blantyre, Malawi, thus:
4. . . . carriage to be performed hereunder by several successive carriers is regarded as
a single operation.
In light of the stipulations expressly specified in the ticket defining the true nature of its contract of carriage
with Antiporda, Lufthansa cannot claim that its liability thereon ceased at Bombay Airport and thence, shifted
to the various carriers that assumed the actual task of transporting said private respondent.
We, therefore, reject Lufthansa's theory that from the time another carrier was engaged to transport Antiporda
on another segment of his trip, it merely acted as a ticket-issuing agent in behalf of said carrier. In the very
nature of their contract, Lufthansa is clearly the principal in the contract of carriage with Antiporda and remains
to be so, regardless of those instances when actual carriage was to be performed by various carriers. The
issuance of a confirmed Lufthansa ticket in favor of Antiporda covering his entire five-leg trip abroad
successive carriers concretely attests to this. This also serves as proof that Lufthansa, in effect guaranteed
that the successive carriers, such as Air Kenya would honor his ticket; assure him of a space therein and
transport him on a particular segment of his trip. This ruling finds corroboration in the Supreme Court decision
in KLM ,   where the same issues were confronted, thus:
12
xxx xxx xxx
The passage tickets of the respondents provide that the carriage to be performed
thereunder by several successive carriers "is to be regarded as a single operation," which is
diametrically incompatible with the theory of the KLM that the respondents entered into a
series of independent contracts with the carriers which took them on the various segments
of their trip. This position of KLM we reject. The respondents dealt exclusively with the KLM
which issued them tickets for their entire trip and which in effect guaranteed to them that
they would have sure space in Aer Lingus flight 861. The respondents, under that
assurance of the internationally prestigious KLM, naturally had the right to expect that their
tickets would be honored by Aer Lingus to which, in the legal sense, the KLM had indorsed
and in effect guaranteed the performance of its principal engagement to carry out the
respondents' scheduled itinerary previously and mutually agreed upon between the parties.
On the issue of whether the Warsaw Convention, particularly Section 2, Article 30 thereof is applicable herein,
we agree with the Court of Appeals in ruling in the negative. We reiterate what has been settled in KLM:
1. The applicability insisted upon by the KLM of Article 30 of the Warsaw Convention cannot
be sustained. That article presupposes the occurrence of either an accident or a delay,
neither of which took place at the Barcelona airport; what is here manifest, instead, is that
the Aer Lingus, through its manager there, refused to transport the respondents to their
planned and contracted destination. . . .
Lufthansa prays this court to take heed of jurisprudence in the United States where the term "delay" was
interpreted to include "bumping-off" or failure to carry a passenger with a confirmed reservation. These
decisions in the United States are not controlling in this jurisdiction. We are not prepared, absent reasons of
compelling nature, to entertain an extended meaning of the term "delay," which in KLM  was given its ordinary
signification. "Construction and interpretation come only after it has been demonstrated that application is
impossible or inadequate without them. The ordinary language of a statute must be given its ordinary meaning
and limited to a reasonable interpretation."   In its ordinary sense, "delay" means to prolong the time of or
13
before; to stop, detain or hinder for a time, or cause someone or something to be behind in schedule or usual
rate of movement in progress.   "Bumping-off," which is the refusal to transport passengers with confirmed
14
reservation to their planned and contracted destinations, totally forecloses said passengers' right to be
transported, whereas delay merely postpones for a time being the enforcement of such right.
Consequently, Section 2, Article 30 of the Warsaw Convention which does not contemplate the instance of
"bumping-off" but merely of simple delay, cannot provide a handy excuse for Lufthansa as to exculpate it from
any liability to Antiporda. The payment of damages is, thus, deemed warranted by this Court. We find no
reversible error in the lower court's award of moral and exemplary damages, including attorney's fees in favor
of Antiporda.
Article 2220 of the Civil Code provides:
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.
According to the findings of the appellate court which affirmed that of the lower court, the reasons given by the
witnesses for Lufthansa for private respondent's being "bumped off" at Bombay airport were conflicting.
Observed the Court of Appeals:
If there was really no seat available because of over-booking, why did Lufthansa confirm the
ticket of the plaintiff-appellee? It has to be pointed out that the confirmed ticket is up to
Blantyre, Malawi, not only to Bombay.
If the plaintiff-appellee was not in the list of passengers of Kenya Airways (the connecting
flight) then Lufthansa must have deceived him in Manila because according to Gerard
Matias, the passengers booked by Kenya Airways for Boeing 707 were 190 passengers
when the plane could accommodate only 144 passengers considering that the name of
plaintiff-appellee was not in the list. If that was the situation, Lufthansa by the issuance of its
ticket should have not assured the plaintiff-appellee that he could get the connecting flights
as scheduled. Surely, Lufthansa before confirming the ticket of the plaintiff-appellee must
have confirmed the flight with Kenya Airways. If it was impossible to get a seat upon its own
investigation in Bombay, then it should have not confirmed the ticket of the plaintiff-appellee.
It is the defendant-appellant who was negligent in the performance of its duties, and plaintiff-
appellee was just plainly deceived.
Since the ticket was marked O.K., meaning confirmed, therefore plaintiff-appellee must have
a definite seat with Kenya Airways but it was lost or given to another person. It is not true
therefore, that plaintiff-appellee's name was not in the list of Kenya Airways. Besides, why
should Lufthansa allow a passenger to depart from the Philippines with a confirmed ticket,
without instructing its Bombay office to reserve a seat with Kenya Airways for its connecting
flight? In spite of the confirmation, Nelda Aquino testified that plaintiff-appellee was stranded
in Bombay because he did not get a seat with Kenya Airways, and his name did not appear
in the list of passengers. Then contrary to the testimonies of Berndt Loewe and Gerard
Matias that the obligation of the defendant-appellant is only up to Bombay and the reason
why plaintiff-appellee was not in the list of passengers is because of overbooking. Nelda
Aquino contrary to the testimonies of the two, testified that the reason for the bumping-off is
that the seat was given to another passenger, to wit:
Q Did you know or eventually learned later that the name of Antiporda
was not in the list of confirmed passengers?
A I only learned from the office at Bombay that it was given to other
passenger  which I only learned from the office at Bombay.
Q Who informed you that the seat of Mr. Antiporda was given to other
passenger?
A From our international officer.
Q Who is he?
A Our Sales Manager.
Q Is he your Sales Manager in Bombay?
A Yes, our Manager.
If Nelda Aquino knew that the reason for the bumping-off is that the seat was given to
another, how come Berndt Loewe, passenger Sales Manager of defendant, Gerard Matias,
an employee of defendant-appellant in Bombay did not know the said reason why the name
of plaintiff-appellee did not appear in the list of passengers? It is either they knew the truth
but because they wanted to escape liability they pretended not to know the truth.
Clearly, bad faith attended the performance of the contract of carriage, for even while Antiporda was in
Bombay, representatives of Lufthansa already tried to evade liability first, by claiming that the contract of
carriage between Lufthansa and Antiporda ceased at Bombay airport, in disregard of the fact that Antiporda
was holding a Lufthansa ticket for the entire five-leg trip; second, despite Berndt Loewe's knowledge that
Antiporda's seat was allowed to be given to another passenger, the same suppressed the information and
feigned ignorance of the matter, presenting altogether another reason why Antiporda was not listed in the
manifest, i.e. that Air Kenya Boeing 707 was overbooked, notwithstanding clear proof that Lufthansa in Manila
confirmed his reservation for said flight.
Antiporda is likewise entitled to the award of exemplary damages on the basis of Article 2232 of the Civil Code
which provides:
Art. 2232. In contracts and quasi-contracts, the court may award exemplary damages if the
defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner.
There is every indication that Lufthansa, through its representatives in Bombay, acted in a reckless and
malevolent manner in dealing with Antiporda.
As found by the trial court:
The breach of the guarantee was aggravated by the discourteous and highly arbitrary
conduct of Gerard Matias, an official of Lufthansa in Bombay. Bumped off from his
connecting flight to Nairobi and stranded in the Bombay Airport for 32 hours, when plaintiff
insisted on taking his scheduled flight to Nairobi, Gerard Matias got angry and threw the
ticket and passport on plaintiff's lap and was ordered to go to the basement with his heavy
luggages for no reason at all. It was a difficult task for the plaintiff to carry three luggages
and yet Gerard Matias did not even offer to help him. Plaintiff requested accommodation but
Matias ignored it and just left. Not even Lufthansa office in Bombay, after learning plaintiff's
being stranded in Bombay and his accommodation problem, provided any relief to plaintiff's
sordid situation. Plaintiff has to stay in the transit area and could not sleep for fear that his
luggages might be lost. Everytime he went to the toilet, he had to drag with him his
luggages. He tried to eat the high-seasoned food available at the airport but developed
stomach trouble. It was indeed a pathetic sight that the plaintiff, an official of the Central
Bank, a multi-awarded institutional expert, tasked to perform consultancy work in a World
Bank funded agricultural bank project in Malawi instead found himself stranded in a foreign
land where nobody was expected to help him in his predicament except the defendant, who
displayed utter lack of concern of its obligation to the plaintiff and left plaintiff alone in his
misery at the Bombay airport.
These findings of the trial court were affirmed by the Court of Appeals on the ground that there are no cogent
reasons to justify a contrary finding. The same holds true with this Court. The findings of fact of lower courts
are binding on us and will not be generally disturbed on appeal.   In affirming the lower court's award of
15
damages to Antiporda, we take into account his high position in the government, coupled with the fact that he
failed to meet his professional commitment in Blantyre, Malawi due to the "bumping-off" incident accompanied
by rude and discourteous behavior on the part of airline officials who should have been the first to attend to his
travel needs.
WHEREFORE, the petition for review is hereby DENIED and the decision of the Court of Appeals AFFIRMED.
Costs against petitioner.
SO ORDERED.
G.R. No. 119706 March 14, 1996
PHILIPPINE AIRLINES, INC., petitioner, vs. COURT OF APPEALS and GILDA C. MEJIA, respondents.
 REGALADO, J.:
This is definitely not a case of first impression. The incident which eventuated in the present controversy is a
drama of common contentious occurrence between passengers and carriers whenever loss is sustained by
the former. Withal, the exposition of the factual ambience and the legal precepts in this adjudication may
hopefully channel the assertiveness of passengers and the intransigence of carriers into the realization that at
times a bad extrajudicial compromise could be better than a good judicial victory.
Assailed in this petition for review is the decision of respondent Court of Appeals in CA-G.R. CV No.
42744  which affirmed the decision of the lower court   finding petitioner Philippine Air Lines, Inc. (PAL) liable
1 2
as follows:
ACCORDINGLY, judgment is hereby rendered ordering defendant Philippine Air Lines, Inc.,
to pay plaintiff Gilda C. Mejia:
(1) P30,000.00 by way of actual damages of the microwave oven;
(2) P10,000.00 by way of moral damages;
(3) P20,000.00 by way of exemplary damages;
(4) P10,000.00 as attorney's fee;
all in addition to the costs of the suit.
Defendant's counterclaim is hereby dismissed for lack of merit. 3
The facts as found by respondent Court of Appeals are as follows:
On January 27, 1990, plaintiff Gilda C. Mejia shipped thru defendant, Philippine Airlines, one
(1) unit microwave oven, with a gross weight of 33 kilograms from San Francisco, U.S.A. to
Manila, Philippines. Upon arrival, however, of said article in Manila, Philippines, plaintiff
discovered that its front glass door was broken and the damage rendered it unserviceable.
Demands both oral and written were made by plaintiff against the defendant for the
reimbursement of the value of the damaged microwave oven, and transportation charges
paid by plaintiff to defendant company. But these demands fell on deaf ears.
On September 25, 1990, plaintiff Gilda C. Mejia filed the instant action for damages against
defendant in the lower court.
In its answer, defendant Airlines alleged inter alia, by way of special and affirmative
defenses, that the court has no jurisdiction over the case; that plaintiff has no valid cause of
action against defendant since it acted only in good faith and in compliance with the
requirements of the law, regulations, conventions and contractual commitments; and that
defendant had always exercised the required diligence in the selection, hiring and
supervision of its employees. 4
What had theretofore transpired at the trial in the court a quo is narrated as follows:
Plaintiff Gilda Mejia testified that sometime on January 27, 1990, she took defendant's plane
from San Francisco, U.S.A. for Manila, Philippines (Exh. "F"). Amongst her baggages (sic)
was a slightly used microwave oven with the brand name "Sharp" under PAL Air Waybill No.
0-79-1013008-3 (Exh. "A"). When shipped, defendant's office at San Francisco inspected it.
It was in good condition with its front glass intact. She did not declare its value upon the
advice of defendant's personnel at San Francisco.
When she arrived in Manila, she gave her sister Concepcion C. Diño authority to claim her
baggag(e) (Exh. "G") and took a connecting flight for Bacolod City.
When Concepcion C. Diño claimed the baggag(e) (Exh. "B") with defendant, then with the
Bureau of Customs, the front glass of the microwave oven was already broken and cannot
be repaired because of the danger of radiation. They demanded from defendant thru Atty.
Paco P30,000.00 for the damages although a brand new one costs P40,000.00, but
defendant refused to pay.
 Hence, plaintiff engaged the services of counsel. Despite demand (Exh. "E") by counsel,
defendant still refused to pay.
The damaged oven is still with defendant. Plaintiff is engaged in (the) catering and
restaurant business. Hence, the necessity of the oven. Plaintiff suffered sleepless nights
when defendant refused to pay her (for) the broken oven and claims P10,000.00 moral
damages, P20,000.00 exemplary damages, P10,000.00 attorney's fees plus P300.00 per
court appearance and P15,000.00 monthly loss of income in her business beginning
February, 1990.
Defendant Philippine Airlines thru its employees Rodolfo Pandes and Vicente Villaruz
posited that plaintiff's claim was not investigated until after the filing of the formal claim on
August 13, 1990 (Exh. "6" also Exh. "E"). During the investigations, plaintiff failed to submit
positive proof of the value of the cargo. Hence her claim was denied.
Also plaintiff's claim was filed out of time under paragraph 12, a (1) of the Air Waybill (Exh.
"A", also Exh. "1") which provides: "(a) the person entitled to delivery must make a
complaint to the carrier in writing in case: (1) of visible damage to the goods, immediately
after discovery of the damage and at the latest within 14 days from the receipt of the
goods.  5
As stated at the outset, respondent Court of Appeals similarly ruled in favor of private respondent by affirming
in full the trial court's judgment in Civil Case No. 6210, with costs against petitioner.  Consequently, petitioner
6 Counsel for private respondent refutes these arguments by saying that due to her eagerness to ship the
now impugns respondent appellate court's ruling insofar as it agrees with (1) the conclusions of the trial court
that since the air waybill is a contract of adhesion, its provisions should be strictly construed against herein
petitioner; (2) the finding of the trial court that herein petitioner's liability is not limited by the provisions of the
air waybill; and (3) the award by the trial court to private respondent of moral and exemplary damages,
attorney's fees and litigation expenses.
The trial court relied on the ruling in the case of Fieldmen's Insurance Co., Inc.  vs. Vda.  De Songco, et al.  in 7
finding that the provisions of the air waybill should be strictly construed against petitioner. More particularly,
the court below stated its findings thus:
In this case, it is seriously doubted whether plaintiff had read the printed conditions at the
back of the Air Waybill (Exh. "1"), or even if she had, if she was given a chance to negotiate
on the conditions for loading her microwave oven. Instead she was advised by defendant's
employee at San Francisco, U.S.A., that there is no need to declare the value of her oven
since it is not brand new. Further, plaintiff testified that she immediately submitted a formal
claim for P30,000.00 with defendant. But their claim was referred from one employee to
another th(e)n told to come back the next day, and the next day, until she was referred to a
certain Atty. Paco. When they got tired and frustrated of coming without a settlement of their
claim in sight, they consulted a lawyer who demanded from defendant on August 13, 1990
(Exh. "E", an[d] Exh. "6").
The conclusion that inescapably emerges from the above findings of fact is to concede it
with credence. . . . .8
Respondent appellate court approved said findings of the trial court in this manner:
We cannot agree with defendant-appellant's above contention. Under our jurisprudence, the
Air Waybill is a contract of adhesion considering that all the provisions thereof are prepared
and drafted only by the carrier (Sweet Lines v. Teves, 83 SCRA 361). The only participation
left of the other party is to affix his signature thereto (BPI Credit Corporation vs. Court of
Appeals, 204 SCRA 601; Saludo, Jr. vs. C.A., 207 SCRA 498; Maersk vs. Court of Appeals,
222 SCRA 108, among the recent cases). In the earlier case of Angeles v. Calasanz, 135
SCRA 323, the Supreme Court ruled that "the terms of a contract [of adhesion] must be
interpreted against the party who drafted the same." . . . .
9
Petitioner airlines argues that the legal principle enunciated in Fieldmen's Insurance does not apply to the
present case because the provisions of the contract involved here are neither ambiguous nor obscure. The
front portion of the air waybill contains a simple warning that the shipment is subject to the conditions of the
contract on the dorsal portion thereof regarding the limited liability of the carrier unless a higher valuation is
declared, as well as the reglementary period within which to submit a written claim to the carrier in case of
damage or loss to the cargo. Granting that the air waybill is a contract of adhesion, it has been ruled by the
Court that such contracts are not entirely prohibited and are in fact binding regardless of whether or not
respondent herein read the provisions thereof. Having contracted the services of petitioner carrier instead of
other airlines, private respondent in effect negotiated the terms of the contract and thus became bound
thereby. 10
microwave oven to Manila, private respondent assented to the terms and conditions of the contract without
any opportunity to question or change its terms which are practically on a "take-it-or-leave-it" basis, her only
participation therein being the affixation of her signature. Further, reliance on the Fieldmen's Insurance case is
misplaced since it is not the ambiguity or obscurity of the stipulation that renders necessary the strict
interpretation of a contract of adhesion against the drafter, but the peculiarity of the transaction wherein one
party, normally a corporation, drafts all the provisions of the contract without any participation whatsoever on
the part of the other party other than affixment of signature. 11
A review of jurisprudence on the matter reveals the consistent holding of the Court that contracts of adhesion
are not invalid  per se and that it has on numerous occasions upheld the binding effect thereof.   As explained
12
in Ong Yiu vs.  Court of Appeals, et al., supra:
. . . . Such provisions have been held to be a part of the contract of carriage, and valid and
binding upon the passenger regardless of the latter's lack of knowledge or assent to the
regulation. It is what is known as a contract of "adhesion," in regards which it has been said
that contracts of adhesion wherein one party imposes a ready-made form of contract on the
other, as the plane ticket in the case at bar, are contracts not entirely prohibited. The one
who adheres to the contract is in reality free to reject it entirely; if he adheres, he gives his
consent. . . , a contract limiting liability upon an agreed valuation does not offend against the
policy of the law forbidding one from contracting against his own negligence.
As rationalized in Saludo, Jr. vs.  Court of Appeals, et al., supra:
 . . . , it should be borne in mind that a contract of adhesion may be struck down as void and
unenforceable, for being subversive of public policy, only when the weaker party is imposed
upon in dealing with the dominant bargaining party and is reduced to the alternative of
taking it or leaving it, completely deprived of the opportunity to bargain on equal
footing. . . . .
but subject to the caveat that —
. . . . Just because we have said that Condition No. 5 of the airway bill is binding upon the
parties to and fully operative in this transaction, it does not mean, and let this serve as fair
warning to respondent carriers, that they can at all times whimsical seek refuge from liability
in the exculpatory sanctuary of said Condition No. 5 . . . .
The peculiar nature of such contracts behooves the Court to closely scrutinize the factual milieu to which the
provisions are intended to apply. Thus, just as consistently and unhesitatingly, but without categorically
invalidating such contracts, the Court has construed obscurities and ambiguities in the restrictive provisions of
contracts of adhesion strictly albeit not unreasonably against the drafter thereof when justified in light of the
operative facts and surrounding circumstances.  13
We find nothing objectionable about the lower court's reliance upon the Fieldmen's Insurance case, the
principles wherein squarely apply to the present petition. The parallelism between the aforementioned case
and this one is readily apparent for, just as in the instant case, it is the binding effect of the provisions in a
contract of adhesion (an insurance policy in Fieldmen's Insurance) that is put to test.
A judicious reading of the case reveals that what was pivotal in the judgment of liability against petitioner
insurance company therein, and necessarily interpreting the provisions of the insurance policy as ineffective,
was the finding that the representations made by the agent of the insurance company rendered it impossible
to comply with the conditions of the contract in question, rather than the mere ambiguity of its terms. The
extended pronouncements regarding strict construction of ambiguous provisions in an adhesion contract
against its drafter, which although made by the Court as an aside but has perforce evolved into a judicial tenet
over time, was actually an incidental statement intended to emphasize the duty of the court to protect the
weaker, as against the more dominant, party to a contract, as well as to prevent the iniquitous situation
wherein the will of one party is imposed upon the other in the course of negotiation.
Thus, there can be no further question as to the validity of the terms of the air waybill, even if the same
constitutes a contract of adhesion. Whether or not the provisions thereof particularly on the limited liability of
the carrier are binding on private respondent in this instance must be determined from the facts and
circumstances involved vis-a-vis the nature of the provisions sought to be enforced, taking care that equity
and fair play should characterize the transaction under review.
On petitioner's insistence that its liability for the damage to private respondent's microwave oven, if any,
should be limited by the provisions of the air waybill, the lower court had this to say:
By and large, defendant's evidence is anchored principally on plaintiff's alleged failure to
comply with paragraph 12, a(1) (Exh. "1-C-2") of the Air waybill (Exh. "A," also Exh. "1"), by
filing a formal claim immediately after discovery of the damage. Plaintiff filed her formal
claim only on August 13, 1990 (Exh. "6", also Exh. "E"). And, failed to present positive proof
on the value of the damaged microwave oven. Hence, the denial of her claim.
This Court has misgivings about these pretensions of defendant.
xxx xxx xxx
Finally, the Court finds no merit to defendant's contention that under the Warsaw
Convention, its liability if any, cannot exceed U.S. $20.00 based on weight as plaintiff did not
declare the contents of her baggage nor pay additional charges before the flight.  14
The appellate court declared correct the non-application by the trial court of the limited liability of therein
defendant-appellant under the "Conditions of the Contract" contained in the air waybill, based on the ruling
in Cathay Pacific Airways, Ltd. vs.  Court of Appeals, et al.,   which substantially enunciates the rule that while
15
the Warsaw Convention has the force and effect of law in the Philippines, being a treaty commitment by the
government and as a signatory thereto, the same does not operate as an exclusive enumeration of the
instances when a carrier shall be liable for breach of contract or as an absolute limit of the extent of liability,
nor does it preclude the operation of the Civil Code or other pertinent laws.
Petitioner insists that both respondent court and the trial court erred in finding that petitioner's liability, if any, is
not limited by the provisions of the air waybill, for, as evidence of the contract of carriage between petitioner
and private respondent, it substantially states that the shipper certifies to the correctness of the entries
contained therein and accepts that the carrier's liability is limited to US $20 per kilogram of goods lost,
damaged or destroyed unless a value is declared and a supplementary charge paid. Inasmuch as no such
declaration was made by private respondent, as she admitted during cross-examination, the liability of
petitioner, if any, should be limited to 28 kilograms multiplied by US $20, or $560. Moreover, the validity of
these conditions has been upheld in the leading case of Ong Yiu vs. Court of Appeals, et al., supra, and
subsequent cases, for being a mere reiteration of the limitation of liability under the Warsaw Convention,
which treaty has the force and effect of law.  16
It is additionally averred that since private respondent was merely advised, not ordered, that she need not
declare a higher value for her cargo, the final decision of refraining from making such a declaration fell on
private respondent and should not put the petitioner in estoppel from invoking its limited liability. 7 1
In refutation, private respondent explains that the reason for the absence of a declaration of a higher value
was precisely because petitioner's personnel in San Francisco, U.S.A. advised her not to declare the value of
her cargo, which testimony has not at all been rebutted by petitioner. This being so, petitioner is estopped
from faulting private respondent for her failure to declare the value of the microwave oven.  18
The validity of provisions limiting the liability of carriers contained in bills of lading have been consistently
upheld for the following reason:
. . . . The stipulation in the bill of lading limiting the common carrier's liability to the value of
goods appearing in the bill, unless the shipper or owner declares a greater value, is valid
 and binding. The limitation of the carrier's liability is sanctioned by the freedom of the Yes, sir.
contracting parties to establish such stipulations, clauses, terms, or conditions as they may ATTY. VINCO
deem convenient, provided they are not contrary to law, morals, good customs and public And the PAL personnel may or may not accept the
policy. . . . . 19

baggage?
WITNESS
However, the Court has likewise cautioned against blind reliance on adhesion contracts where the Yes, sir.
facts and circumstances warrant that they should be disregarded.  20

ATTY. VINCO
According to what is stated as in the acceptance of the
In the case at bar, it will be noted that private respondent signified an intention to declare the value of the
cargo, it is to the best interest of the airlines, that is, he
microwave oven prior to shipment, but was explicitly advised against doing so by PAL's personnel in San
Francisco, U.S.A., as borne out by her testimony in court: want(s) also that the airlines would be free from any
liability. Could that be one of the grounds for not
x x x           x x x          x x x admitting a baggage?
WITNESS
Safety is number one (1)
Q Did you declare the value of the shipment?
x x x           x x x          x x x
A No. I was advised not to.
Q Who advised you? ATTY. VINCO
A At the PAL Air Cargo.  21 So, this baggage was accepted and admitted in San
Francisco?
WITNESS
It cannot be denied that the attention of PAL through its personnel in San Francisco was sufficiently called to Yes, sir.
the fact that private respondent's cargo was highly susceptible to breakage as would necessitate the ATTY. VINCO
declaration of its actual value. Petitioner had all the opportunity to check the condition and manner of packing
And you could not show any document to the Court that
prior to acceptance for shipment,   as well as during the preparation of the air waybill by PAL's Acceptance
22

Personnel based on information supplied by the shipper,   and to reject the cargo if the contents or the
23 would suggest that this baggage was denied
packing did not meet the company's required specifications. Certainly, PAL could not have been otherwise admittance by your office at San Francisco?
prevailed upon to merely accept the cargo. WITNESS
No, I cannot show.
While Vicente Villaruz, officer-in-charge of the PAL Import Section at the time of incident, posited that there ATTY. VINCO
may have been inadequate and improper packing of the cargo,   which by itself could be a ground for refusing
24
Now, can you show any document that would suggest
carriage of the goods presented for shipment, he nonetheless admitted on cross-examination that private that there was insufficient pac(k)aging on this particular
respondent's cargo was accepted by PAL in its San Francisco office: baggage from abroad?
WITNESS
ATTY. VINCO No, sir.  25

So that, be that as it may, my particular concern is that,

it is the PAL personnel that accepts the baggage?
WITNESS
In response to the trial court's questions during the trial, he also stated that while the passenger's declaration
Yes, sir. regarding the general or fragile character of the cargo is to a certain extent determinative of its classification,
ATTY. VINCO PAL nevertheless has and exercises discretion as to the manner of handling required by the nature of the
Also, if he comes from abroad like in this particular cargo it accepts for carriage. He further opined that the microwave oven was only a general, not a fragile,
case, it is the PAL personnel who accepts the cargo which did not require any special handling.  26

baggage?
WITNESS
There is no absolute obligation on the part of a carrier to accept a cargo. Where a common carrier accepts a After that annotation placed by Mr. Villaruz, I went
cargo for shipment for valuable consideration, it takes the risk of delivering it in good condition as when it was home and I followed it up the next day with the Clerk of
loaded. And if the fact of improper packing is known to the carrier or its personnel, or apparent upon PAL cargo office.
observation but it accepts the goods notwithstanding such condition, it is not relieved of liability for loss or
ATTY. VINCO
injury resulting therefrom.  7
2

What did the clerk tell you?

WITNESS
The acceptance in due course by PAL of private respondent's cargo as packed and its advice against the
She told me that the claim was being processed and I
need for declaration of its actual value operated as an assurance to private respondent that in fact there was
no need for such a declaration. Petitioner can hardly be faulted for relying on the representations of PAL's own made several phone calls after that. I started my follow-
personnel. ups February up to June 1990.
ATTY. VINCO
In other words, private respondent Mejia could and would have complied with the conditions stated in the air And what results did those follow-ups produce?
waybill, i.e., declaration of a higher value and payment of supplemental transportation charges, entitling her to WITNESS
recovery of damages beyond the stipulated limit of US $20 per kilogram of cargo in the event of loss or All they said (was) that the document was being
damage, had she not been effectively prevented from doing so upon the advice of PAL's personnel for processed, that they were waiting for Atty. Paco to
reasons best known to themselves. report to the office and they could refer the matter to
Atty. Paco.
As pointed out by private respondent, the aforestated facts were not denied by PAL in any of its pleadings nor ATTY. VINCO
rebutted by way of evidence presented in the course of the trial, and thus in effect it judicially admitted that
Who is this Atty. Paco?
such an advice was given by its personnel in San Francisco, U.S.A. Petitioner, therefore, is estopped from
blaming private respondent for not declaring the value of the cargo shipped and which would have otherwise WITNESS
entitled her to recover a higher amount of damages. The Court's bidding in the Fieldmen's Insurance case He was the one in-charge of approving our claim.
once again rings true: ATTY. VINCO
Were you able to see Atty. Paco?
. . . As estoppel is primarily based on the doctrine of good faith and the avoidance of harm WITNESS
that will befall an innocent party due to its injurious reliance, the failure to apply it in this Yes, sir. I personally visited Atty. Paco together with my
case would result in gross travesty of justice. auntie who was a former PAL employee.

We likewise uphold the lower court's finding that private respondent complied with the requirement for the x x x           x x x          x x x
immediate filing of a formal claim for damages as required in the air waybill or, at least, we find that there was
substantial compliance therewith.
ATTY. VINCO
Private respondent testified that she authorized her sister, Concepcion Diño, to claim her cargo consisting of a So, what did you do, did you make a report or did you
microwave oven since the former had to take a connecting flight to Bacolod City on the very same afternoon of
tell Atty. Paco of your scouting around for a possible
the day of her arrival.   As instructed, Concepcion Diño promptly proceeded to PAL's Import Section the next
28

day to claim the oven. Upon discovering that the glass door was broken, she immediately filed a claim by way replacement?
of the baggage freight claim   on which was duly annotated the damage sustained by the oven. 
29 30 WITNESS
I did call him back at his office. I made a telephone call.
Her testimony relates what took place thereafter: ATTY. VINCO
And what answer did Atty. Paco make after you have
ATTY. VINCO reported back to him?
So, after that inspection, what did you do? WITNESS
WITNESS They told me that they were going to process the claim
based on the price that I gave them but there was no
definite result.
 ATTY. VINCO
How many times did you go and see Atty. Paco x x x           x x x          x x x
regarding the claim of your sister?
WITNESS WITNESS:
I made one personal visit and several follow-up calls. A Yes, sir.
With Atty. Paco, I made one phone call but I made
several phone calls with his secretary or the clerk at ATTY. VINCO:
PAL cargo office and I was trying to locate him but Q You know this fact because a personnel saw you in one of the pre-trial
unfortunately, he was always out of his office. 
31
here when this case was heard before the sala of Judge Moscardon, is
that correct?

PAL claims processor, Rodolfo Pandes, * confirmed having received the baggage freight claim on January 30, WITNESS:
1990   and the referral to and extended pendency of the private respondent's claim with the office of Atty.
32
A Yes.
Paco, to wit:
ATTY. VINCO:
Q In other words, the plaintiff rather had never stop(ped) in her desire for
your company to settle this claim, right?
ATTY. VINCO:
Q And you did instruct the claimant to see the Claim Officer of the WITNESS:
company, right? A Yes, sir.  33

WITNESS:
A Yes, sir. Considering the abovementioned incidents and private respondent Mejia's own zealous efforts in following up
the claim,   it was clearly not her fault that the letter of demand for damages could only be filed, after months
34

ATTY. VINCO: of exasperating follow-up of the claim, on August 13, 1990.   If there was any failure at all to file the formal
35

Q And the Claim Officer happened to be Atty. Paco? claim within the prescriptive period contemplated in the air waybill, this was largely because of PAL's own
doing, the consequences of which cannot, in all fairness, be attributed to private respondent.
WITNESS:
A Yes, sir. Even if the claim for damages was conditioned on the timely filing of a formal claim, under Article 1186 of the
Civil Code that condition was deemed fulfilled, considering that the collective action of PAL's personnel in
tossing around the claim and leaving it unresolved for an indefinite period of time was tantamount to
ATTY. VINCO: "voluntarily preventing its fulfillment." On grounds of equity, the filing of the baggage freight claim, which
Q And you know that the plaintiff thru her authorized representative sufficiently informed PAL of the damage sustained by private respondent's cargo, constituted substantial
Concepcion Diño, who is her sister had many times gone to Atty. Paco, in compliance with the requirement in the contract for the filing of a formal claim.
connection with this claim of her sister?
All told, therefore, respondent appellate court did not err in ruling that the provision on limited liability is not
WITNESS: applicable in this case. We, however, note in passing that while the facts and circumstances of this case do
A Yes, sir. not call for the direct application of the provisions of the Warsaw Convention, it should be stressed that,
indeed, recognition of the Warsaw Convention does not preclude the operation of the Civil Code and other
pertinent laws in the determination of the extent of liability of the common carrier.  36

ATTY. VINCO:
Q As a matter of fact even when the complaint was already filed here in
The Warsaw Convention, being a treaty to which the Philippines is a signatory, is as much a part of Philippine
Court the claimant had continued to call about the settlement of her claim
law as the Civil Code, Code of Commerce and other municipal special laws.   7 The provisions therein
3

with Atty. Paco, is that correct?

contained, specifically on the limitation of carrier's liability, are operative in the Philippines but only in
appropriate situations.
Petitioner ascribes ultimate error in the award of moral and exemplary damages and attorney's fees in favor of
private respondent in that other than the statement of the trial court that petitioner acted in bad faith in denying
possession of defendant-appellant, entitling her to the award of moral and exemplary
damages (Cathay Pacific Airways, Ltd. vs. C.A., supra; Arts. 2219 & 2221, New Civil Code),
and certainly plaintiff-appellant's unjust refusal to comply with her valid demand for
payment, thereby also entitling her to reasonable attorney's fees [Art. 2208 (2) and
(11), id.]. 
41

private respondent's claim, which was affirmed by the Court of Appeals, there is no evidence on record that
the same is true. The denial of private respondent's claim was supposedly in the honest belief that the same
had prescribed, there being no timely formal claim filed; and despite having been given an opportunity to
submit positive proof of the value of the damaged microwave oven, no such proof was submitted. Petitioner
insists that its failure to deliver the oven in the condition in which it was shipped could hardly be considered as
amounting to bad faith. 38
It will be noted that petitioner never denied that the damage to the microwave oven was sustained while the
same was in its custody. The possibility that said damage was due to causes beyond the control of PAL has
effectively been ruled out since the entire process in handling of the cargo — from the unloading thereof from
the plane, the towing and transfer to the PAL warehouse, the transfer to the Customs examination area, and
its release thereafter to the shipper — was done almost exclusively by, and with the intervention or, at the very
least, under the direct supervision of a responsible PAL personnel. 42

Private respondent counters that petitioner's failure to deliver the microwave oven in the condition in which it
was received can be described as gross negligence amounting to bad faith, on the further consideration that it The very admissions of PAL, through Vicente Villaruz of its Import Section, as follows:
failed to prove that it exercised the extraordinary diligence required by law, and that no explanation
whatsoever was given as to why the front glass of the oven was broken.  39
ATTY. VINCO
So that, you now claim, Mr. Witness, that from the time
The trial court justified its award of actual, moral and exemplary damages, and attorney's fees in favor of the cargo was unloaded from the plane until the time it
private respondent in this wise: reaches the Customs counter where it was inspected,
all the way, it was the PAL personnel who did all these
Since the plaintiff's baggage destination was the Philippines, Philippine law governs the things?
liability of the defendant for damages for the microwave oven.
WITNESS
Yes, however, there is also what we call the Customs
The provisions of the New Civil Code on common carriers are Article(s) 1733, 1735 and storekeeper and the Customs guard along with the
1753 . . . . cargo.

xxx xxx xxx ATTY. VINCO

You made mention about a locator?
In this case, defendant failed to overcome, not only the presumption but more importantly,
plaintiff's evidence that defendant's negligence was the proximate cause of the damages of WITNESS
the microwave oven. Further plaintiff has established that defendant acted in bad faith when Yes, sir.
it denied the former's claim on the ground that the formal claim was filed beyond the period
as provided in paragraph 12 (a-1) (Exh. "1-C-2") of the Air Waybill (Exh. "1", also Exh. "A"), ATTY. VINCO
when actually, Concepcion Diño, sister of plaintiff has immediately filed the formal claim This locator, is he an employee of the PAL or the
upon discovery of the damage.  40
Customs?
WITNESS
He is a PAL employee.  43

Respondent appellate court was in full agreement with the trial court's finding of bad faith on the part of
petitioner as a basis for the award of the aforestated damages, declaring that:
lead to the inevitable conclusion that whatever damage may have been sustained by the cargo is due
As to the last assigned error, a perusal of the facts and law of the case reveals that the to causes attributable to PAL's personnel or, at all events, under their responsibility.
lower court's award of moral and exemplary damages, attorney's fees and costs of suit to
plaintiff-appellee is in accordance with current laws and jurisprudence on the matter. Indeed,
aside from the fact that defendant-appellant acted in bad faith in breaching the contract and Moreover, the trial court underscored the fact that petitioner was not able to overcome the statutory
in denying plaintiff's valid claim for damages, plaintiff-appellee underwent profound distress, presumption of negligence in Article 1735 which, as a common carrier, it was laboring under in case of loss,
sleepless nights, and anxiety upon knowledge of her damaged microwave oven in destruction or deterioration of goods, through proper showing of the exercise of extraordinary diligence.
Neither did it prove that the damage to the microwave oven was because of any of the excepting causes
under Article 1734, all of the same Code. Inasmuch as the subject item was received in apparent good
condition, no contrary notation or exception having been made on the air waybill upon its acceptance for
shipment, the fact that it was delivered with a broken glass door raises the presumption that PAL's personnel
were negligent in the carriage and handling of the cargo.  44
Furthermore, there was glaringly no attempt whatsoever on the part of petitioner to explain the cause of the
damage to the oven. The unexplained cause of damage to private respondent's cargo constitutes gross
carelessness or negligence which by itself justifies the present award of damages.   The equally unexplained
45
and inordinate delay in acting on the claim upon referral thereof to the claims officer, Atty. Paco, and the
noncommittal responses to private respondent's entreaties for settlement of her claim for damages belies
petitioner's pretension that there was no bad faith on its part. This unprofessional indifference of PAL's
personnel despite full and actual knowledge of the damage to private respondent's cargo, just to be
exculpated from liability on pure technicality and bureaucratic subterfuge, smacks of willful misconduct and
insensitivity to a passenger's plight tantamount to bad faith   and renders unquestionable petitioner's liability
46
for damages. In sum, there is no reason to disturb the findings of the trial court in this case, especially with its
full affirmance by respondent Court of Appeals.
On this note, the case at bar goes into the annals of our jurisprudence after six years and recedes into the
memories of our legal experience as just another inexplicable inevitability. We will never know exactly how
many man-hours went into the preparation, litigation and adjudication of this simple dispute over an oven,
which the parties will no doubt insist they contested as a matter of principle. One thing, however, is certain. As
long as the first letter in "principle" is somehow outplaced by the peso sign, the courts will always have to
resolve similar controversies although mutual goodwill could have dispensed with judicial recourse.
IN VIEW OF ALL OF THE FOREGOING, the assailed judgment of respondent Court of Appeals is
AFFIRMED in toto.
SO ORDERED.
G.R. No. 104685 March 14, 1996
SABENA BELGIAN WORLD AIRLINES, petitioner, vs. HON. COURT OF APPEALS and MA. PAULA SAN
AGUSTIN, respondents.
VITUG, J.:p
The appeal before the Court involves the issue of an airline's liability for lost luggage. The petition for review
assails the decision of the Court of Appeals,1 dated 27 February 1992, affirming an award of damages made
by the trial court in a complaint filed by private respondent against petitioner.
The factual background of the case, narrated by the trial court and reproduced at length by the appellate
court, is hereunder quoted:
On August 21, 1987, plaintiff was a passenger on board Flight SN 284 of defendant airline
originating from Casablanca to Brussels, Belgium on her way back to Manila. Plaintiff
checked in her luggage which contained her valuables, namely: jewelries valued at
$2,350.00; clothes $1,500.00 shoes/bag $150; accessories $75; luggage itself $10.00; or a
total of $4,265.00, for which she was issued Tag No. 71423. She stayed overnight in
Brussels and her luggage was left on board Flight SN 284.
Plaintiff arrived at Manila International Airport on September 2, 1987 and immediately
submitted her Tag No. 71423 to facilitate the release of her luggage but the luggage was
missing. She was advised to accomplish and submit a property Irregularity Report which
she submitted and filed on the same day.
She followed up her claim on September 14, 1987 but the luggage remained to be missing.
On September 15, 1987, she filed her formal complaint with the office of Ferge Massed,
defendant's Local Manager, demanding immediate attention (Exh. "A").
On September 30, 1987, on the occasion of plaintiffs following up of her luggage claim, she
was furnished copies of defendant's telexes with an information that the Burssel's Office of
defendant found the luggage and that they have broken the locks for identification (Exhibit
"B"). Plaintiff was assured by the defendant that it has notified its Manila Office that the
luggage will be shipped to Manila on October 27, 1987. But unfortunately plaintiff was
informed that the luggage was lost for the second time (Exhibits "C" and "C-1").
At the time of the filing of the complaint, the luggage with its content has not been found.
Plaintiff demanded from the defendant the money value of the luggage and its contents
amounting to $4,265.00 or its exchange value, but defendant refused to settle the claim.
Defendant asserts in its Answer and its evidence tend to show that while it admits that the
plaintiff was a passenger on board Flight No. SN 284 with a piece of checked in luggage
bearing Tag No. 71423, the loss of the luggage was due to plaintiff's sole if not contributory
negligence; that she did not declare the valuable items in her checked in luggage at the
flight counter when she checked in for her flight from Casablanca to Brussels so that either
the representative of the defendant at the counter would have advised her to secure an
insurance on the alleged valuable items and required her to pay additional charges, or
 would have refused acceptance of her baggage as required by the generally accepted
practices of international carriers; that Section 9(a), Article IX of General Conditions of
carriage requiring passengers to collect their checked baggage at the place of stop over,
plaintiff neglected to claim her baggage at the Brussels Airport; that plaintiff should have
retrieved her undeclared valuables from her baggage at the Brussels Airport since her flight
from Brussels to Manila will still have to visit for confirmation inasmuch as only her flight
from Casablanca to Brussels was confirmed; that defendant incorporated in all Sabena
Plane Tickets, including Sabena Ticket No. 082422-72502241 issued to plaintiff in Manila on
August 21, 1987, a warning that "Items of value should be carried on your person" and that
some carriers assume no liability for fragile, valuable or perishable articles and that further
information may be obtained from the carrier for guidance;' that granting without conceding
that defendant is liable, its liability is limited only to US $20.00 per kilo due to plaintiffs failure
to declare a higher value on the contents of her checked in luggage and pay additional
charges thereon. 2 reasons of public policy, common carriers are bound to observe extraordinary diligence in
The trial court rendered judgment ordering petitioner Sabena Belgian World Airlines to pay private respondent
Ma. Paula San Agustin —
(a) . . . US $4,265.00 or its legal exchange in Philippine pesos;
(b) . . . P30,000.00 as moral damages;
(c) . . . P10,000.00 as exemplary damages;
(d) . . . P10,000.00 as attorney's fees; and
(e) (t)he costs of the suit. 3
Sabena appealed the decision of the Regional Trial Court to the Court of Appeals. The appellate court, in its
decision of 27 February 1992, affirmed in toto the trial court's judgment.
Petitioner airline company, in contending that the alleged negligence of private respondent should be
considered the primary cause for the loss of her luggage, avers that, despite her awareness that the flight
ticket had been confirmed only for Casablanca and Brussels, and that her flight from Brussels to Manila had
yet to be confirmed, she did not retrieve the luggage upon arrival in Brussels. Petitioner insists that private
respondent, being a seasoned international traveler, must have likewise been familiar with the standard
provisions contained in her flight ticket that items of value are required to be hand-carried by the passenger
and that the liability of the airline for loss, delay or damage to baggage would be limited, in any event, to only
US $20.00 per kilo unless a higher value is declared in advance and corresponding additional charges are
paid thereon. At the Casablanca International Airport, private respondent, in checking in her luggage,
evidently did not declare its contents or value. Petitioner cites Section 5(c), Article IX, of the General
Conditions of Carriage, signed at Warsaw, Poland, on 02 October 1929, as amended by the Hague Protocol
of 1955, generally observed by International carriers, stating, among other things, that:
Passengers shall not include in his checked baggage, and the carrier may refuse to carry as
checked baggage, fragile or perishable articles, money, jewelry, precious metals, negotiable
papers, securities or other valuable. 4
Fault or negligence consists in the omission of that diligence which is demanded by the nature of an obligation
and corresponds with the circumstances of the person, of the time, and of the place. When the source of an
obligation is derived from a contract, the mere breach or non-fulfillment of the prestation gives rise to the
presumption of fault on the part of the obligor. This rule is no different in the case of common carriers in the
carriage of goods which, indeed, are bound to observe not just the due diligence of a good father of a family
but that of "extraordinary" care in the vigilance over the goods. The appellate court has aptly observed:
. . . Art. 1733 of the [Civil] Code provides that from the very nature of their business and by
the vigilance over the goods transported by them. This extraordinary responsibility,
according to Art. 1736, lasts from the time the goods are unconditionally placed in the
possession of and received by the carrier until they are delivered actually or constructively
to the consignee or person who has the right to receive them. Art. 1737 states that the
common carrier's duty to observe extraordinary diligence in the vigilance over the goods
transported by them remains in full force and effect even when they are temporarily
unloaded or stored in transit. And Art. 1735 establishes the presumption that if the goods
are lost, destroyed or deteriorated, common carriers are presumed to have been at fault or
to have acted negligently, unless they prove that they had observed extraordinary diligence
as required in Article 1733.
The only exceptions to the foregoing extraordinary responsibility of the common carrier is
when the loss, destruction, or deterioration of the goods is due to any of the following
causes:
(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;
(2) Act of the public enemy in war, whether international or civil;
(3) Act or omission of the shipper or owner of the goods;
(4) The character of the goods or defects in the packing or in the containers;
(5) Order or act of competent public authority.
Not one of the above excepted causes obtains in this case. 5
The above rules remain basically unchanged even when the contract is breached by tort  although 6
noncontradictory principles on quasi-delict may then be assimilated as also forming part of the governing law.
Petitioner is not thus entirely off track when it has likewise raised in its defense the tort doctrine of proximate
cause. Unfortunately for petitioner, however, the doctrine cannot, in this particular instance, support its case.
Proximate cause is that which, in natural and continuous sequence, unbroken by any efficient intervening
cause, produces injury and without which the result would not have occurred. The exemplification by the Court
in one case  is simple and explicit; viz:
7
(T)he proximate legal cause is that acting first and producing the injury, either immediately
or by setting other events in motion, all constituting a natural and continuous chain of
events, each having a close causal connection with its immediate predecessor, the final
event in the chain immediately affecting the injury as a natural and probable result of the
cause which first acted, under such circumstances that the person responsible for the first
event should, as an ordinarily prudent and intelligent person, have reasonable ground to
expect at the moment of his act or default that an injury to some person might probably
result therefrom.
It remained undisputed that private respondent's luggage was lost while it was in the custody of petitioner. It
was supposed to arrive on the same flight that private respondent took in returning to Manila on 02 September
1987. When she discovered that the luggage was missing, she promptly accomplished and filed a Property
Irregularity Report. She followed up her claim on 14 September 1987, and filed, on the following day, a formal
letter-complaint with petitioner. She felt relieved when, on 23 October 1987, she was advised that her luggage
had finally been found, with its contents intact when examined, and that she could expect it to arrive on 27
October 1987. She then waited anxiously only to be told later that her luggage had been lost for the second
time. Thus, the appellate court, given all the facts before it, sustained the trial court in finding petitioner
ultimately guilty of "gross negligence" in the handling of private respondent's luggage. The "loss of said
baggage not only once but twice, said the appellate court, "underscores the wanton negligence and lack of
care" on the part of the carrier.
borne out by the language of the Convention, as this Court has now, and at an earlier time,
pointed out. Moreover, slight reflection readily leads to the conclusion that it should be
deemed a limit of liability only in those cases where the cause of the death or injury to
person, or destruction, loss or damage to property or delay in its transport is not attributable
to or attended by any willful misconduct, bad faith, recklessness, or otherwise improper
conduct on the part of any official or employee for which the carrier is responsible, and there
is otherwise no special or extraordinary form of resulting injury. The Convention's
provisions, in short, do not regulate or exclude liability for other breaches of contract by the
carrier or misconduct of its officers and employees, or for some particular or exceptional
type of damage. Otherwise, an air carrier would be exempt from any liability for damages in
the event of its absolute refusal, in bad faith, to comply with a contract of carriage, which is
absurd. Nor may it for a moment be supposed that if a member of the aircraft complement
should inflict some physical injury on a passenger, or maliciously destroy or damage the
latter's property, the Convention might successfully be pleaded as the sole gauge to
determine the carrier's liability to the passenger. Neither may the Convention be invoked to
justify the disregard of some extraordinary sort of damage resulting to a passenger and
preclude recovery therefor beyond the limits set by said Convention. It is in this sense that
the Convention has been applied, or ignored, depending on the peculiar facts presented by
each case.
The Court thus sees no error in the preponderant application to the instant case by the appellate court, as well
as by the trial court, of the usual rules on the extent of recoverable damages beyond the Warsaw limitations.
Under domestic law and jurisprudence (the Philippines being the country of destination), the attendance of
gross negligence (given the equivalent of fraud or bad faith) holds the common carrier liable for all damages
which can be reasonably attributed, although unforeseen, to the non-performance of the obligation,  including
9

The above findings, which certainly cannot be said to be without basis, foreclose whatever rights petitioner moral and exemplary damages.  10

might have had to the possible limitation of liabilities enjoyed by international air carriers under the Warsaw
Convention (Convention for the Unification of Certain Rules Relating to International Carriage by Air, as
amended by the Hague Protocol of 1955, the Montreal Agreement of 1966, the Guatemala Protocol of 1971 WHEREFORE, the decision appealed from is AFFIRMED. Costs against petitioner.
and the Montreal Protocols of 1975). In Alitalia vs. Intermediate Appellate Court,  now Chief Justice Andres R.
8

Narvasa, speaking for the Court, has explained it well; he said: SO ORDERED.

The Warsaw Convention however denies to the carrier availment of the provisions which
exclude or limit his liability, if the damage is caused by his willful misconduct or by such
default on his part as, in accordance with the law of the court seized of the case, is
considered to be equivalent to willful misconduct, or if the damage is (similarly) caused . . .
by any agent of the carrier acting within the scope of his employment. The Hague Protocol
amended the Warsaw Convention by removing the provision that if the airline took all
necessary steps to avoid the damage, it could exculpate itself completely, and declaring the
stated limits of liability not applicable if it is proved that the damage resulted from an act or
omission of the carrier, its servants or agents, done with intent to cause damage or
recklessly and with knowledge that damage would probably result. The same deletion was
effected by the Montreal Agreement of 1966, with the result that a passenger could recover
unlimited damages upon proof of wilful misconduct.

The Convention does not thus operate as an exclusive enumeration of the instances of an
airline's liability, or as an absolute limit of the extent of that liability. Such a proposition is not