Lopez v.

Pan American World Airways

Facts:
Reservation for first class accommodation in Pan American Airlines from Tokyo to San Francisco was made by
Delfin Faustino for then Senator Fernando Lopez and company First class tickets were issued and paid for
The party left !anila for Tokyo as scheduled Senator Lopez re"uested !inister #usue$o to contact the
airlines re$ardin$ their accommodation %owever& they were informed that there was no accommodation for
them #ecause of some ur$ent matters to attend to in San Francisco& they were constrained to take the tourist
fli$ht 'under protest(
Issues:
)*+ ,hether the defendant acted in bad faith for deliberate refusal to comply with its contract to provide first-
class accommodation to the plaintiff
).+ ,hether moral and e/emplary dama$es should be awarded
Held:
)*+ From the evidence of defendant it is in effect admitted that defendant - throu$h its a$ents - first cancelled
plaintiffs& reservations by mistake and thereafter deliberately and intentionally withheld from plaintiffs or
their travel a$ent the fact of said cancellation& lettin$ them $o on believin$ that their first class reservations
stood valid and confirmed 0n so misleadin$ plaintiffs into purchasin$ first class tickets in the conviction that
they had confirmed reservations for the same& when in fact they had none& defendant wilfully and knowin$ly
placed itself into the position of havin$ to breach its a foresaid contracts with plaintiffs should there be no last-
minute cancellation by other passen$ers before fli$ht time& as it turned out in this case Such actuation of
defendant may indeed have been prompted by nothin$ more than the promotion of its self-interest in holdin$
on to Senator Lopez and party as passen$ers in its fli$ht and foreclosin$ on their chances to seek the services
of other airlines that may have been able to afford them first class accommodations All the time& in le$al
contemplation such conduct already amounts to action in bad faith For bad faith means a breach of a known
duty throu$h some motive of interest or ill-will
At the time plaintiffs bou$ht their tickets& defendant& therefore& in breach of its known duty& made plaintiffs
believe that their reservation had not been cancelled Such willful-non-disclosure of the cancellation or
pretense that the reservations for plaintiffs stood - and not simply the erroneous cancellation itself - is the
factor to which is attributable the breach of the resultin$ contracts And& as above-stated& in this respect
defendant clearly acted in bad faith
).+ First& then& as to moral dama$es As a pro/imate result of defendant1s breach in bad faith of its contracts
with plaintiffs& the latter suffered social humiliation& wounded feelin$s& serious an/iety and mental an$uish
For plaintiffs were travellin$ with first class tickets issued by defendant and yet they were $iven only the
tourist class At stop-overs& they were e/pected to be amon$ the first-class passen$ers by those awaitin$ to
welcome them& only to be found amon$ the tourist passen$ers 0t may not be humiliatin$ to travel as tourist
passen$ers2 it is humiliatin$ to be compelled to travel as such& contrary to what is ri$htfully to be e/pected
from the contractual undertakin$
The rationale behind e/emplary or corrective dama$es is& as the name implies& to provide an e/ample or
correction for public $ood Defendant havin$ breached its contracts in bad faith& the court& as stated earlier&
may award e/emplary dama$es in addition to moral dama$es 0n view of its nature& it should be imposed in
such an amount as to sufficiently and effectively deter similar breach of contracts in the future by defendant or
other airlines 0n this li$ht& we find it 3ust to award P45&66666 as e/emplary or corrective dama$es
ABS-CBN VS. CA
G.R. No. 128690
January 21, 1999
FACTS:
In 1990, ABS-CBN and Viva executed a Film Exhibition Ageement !heeb" ABS-CBN !a# given
the ight o$ %#t e$u#al to the next t!ent"-$ou &'() Viva %lm# $o *V teleca#t unde #uch tem#
a# ma" be ageed u+on b" the +atie# heeto, +ovided, ho!eve, that #uch ight #hall be
execi#ed b" ABS-CBN $om the actual o,e in !iting- Con#e.uentl", Viva, though de$endant
/el 0o#aio, o,eed ABS-CBN, though it# vice-+e#ident Chao Santo#-Concio, a li#t o$ thee&1)
%lm +ac2age# &13 title#) $om !hich ABS-CBN ma" execi#e it# ight o$ %#t e$u#al unde the
a$oe-#aid ageement- ABS CBN e4ected #aid li#t-
5n Febua" '6, 199', /el 0o#aio a++oached 7#- Concio, !ith a li#t con#i#ting o$ 8' oiginal
movie title#, a# !ell a# 10( e-un# $om !hich ABS-CBN ma" choo#e anothe 8' title#, o a total
o$ 183 title#, +o+o#ing to #ell to ABS-CBN aiing ight# ove thi# +ac2age o$ 8' oiginal# and 8'
e-un# $o 930,000,000-00- *he +ac2age !a# e4ected b" ABS-CBN-
5n A+il 03, 199', /el 0o#aio and 7- :aciano :o;on o$ 0BS di#cu##ed the tem# and
condition# o$ Viva<# o,e to #ell the 10( %lm#-
5n A+il 06, 199', de$endant /el 0o#aio eceived though hi# #eceta", a hand!itten note
$om 7#- Concio !hich ead#= >?ee<# the da$t o$ the contact- I ho+e "ou %nd eve"thing in
ode,@ to !hich !a# attached a da$t exhibition ageement, a counte-+o+o#al coveing 81 %lm#
$o a con#ideation o$ 918 million- *he #aid counte-+o+o#al !a# ho!eve e4ected b" Viva<#
Boad o$ /iecto#-
5n A+il '9, 199', Viva ganted 0BS the exclu#ive ight to ai 10( Viva-+oduced andAo ac.uied
%lm# including the $outeen &1() %lm# #ub4ect o$ the +e#ent ca#e-
ABS-CBN then %led a a com+laint $o #+eci%c +e$omance- 0*C endeed a deci#ion in $avo o$
0BS and VIVA and again#t ABS-CBN, uling that thee !a# no meeting o$ mind# on the +ice and
tem# o$ the o,e- Futhemoe, the ight o$ %#t e$u#al unde the 1990 Film Exhibition
Ageement had +eviou#l" been execi#ed +e 7#- Concio<# lette to /el 0o#aio tic2ing o, ten
title# acce+table to them, !hich !ould have made the 199' ageement an entiel" ne!
contact- *he Cout o$ A++eal# aBmed the deci#ion o$ the 0*C- ?ence, thi# +etition-
ISSUES
1- Chethe o not thee !a# no +e$ected contact bet!een +etitione and +ivate e#+ondent
'- Chethe o not ABS-CBN ha# alead" execi#ed it# ight o$ %#t e$u#al
E!"
1- *he i##ue #hould be e#olved again#t ABS-CBN- Contact# that ae con#en#ual in natue ae
+e$ected u+on mee meeting o$ the mind#- 5nce thee i# concuence bet!een the o,e and
the acce+tance u+on the #ub4ect matte, con#ideation, and tem# o$ +a"ment a contact i#
+oduced- *he o,e mu#t be cetain- *o convet the o,e into a contact, the acce+tance mu#t
be ab#olute and mu#t not .uali$" the tem# o$ the o,eD it mu#t be +lain, une.uivocal,
unconditional, and !ithout vaiance o$ an" #ot $om the +o+o#al- A .uali%ed acce+tance, o
one that involve# a ne! +o+o#al, con#titute# a counte-o,e and i# a e4ection o$ the oiginal
o,e- Con#e.uentl", !hen #omething i# de#ied !hich i# not exactl" !hat i# +o+o#ed in the
o,e, #uch acce+tance i# not #uBcient to geneate con#ent becau#e an" modi%cation o
vaiation $om the tem# o$ the o,e annul# the o,e-
Even i$ it be conceded aguendo that /el 0o#aio had acce+ted the counte-o,e, the
acce+tance did not bind VIVA, a# thee !a# no +oo$ !hat#oeve that /el 0o#aio had the
#+eci%c authoit" to do #o- *hat /el 0o#aio did not have the authoit" to acce+t ABS-CBN<#
counte-o,e !a# be#t evidenced b" hi# #ubmi##ion o$ the da$t contact to VIVA<# Boad o$
/iecto# $o the latte<# a++oval- In an" event, thee !a# bet!een /el 0o#aio and Eo+e; III no
meeting o$ mind#-
'- Fe#- ABS-CBN<# ight o$ %#t e$u#al had alead" been execi#ed !hen 7#- Concio !ote to VIVA
tic2ing o, ten %lm#- A# ob#eved b" the tial cout, the #ub#e.uent negotiation !ith ABS-CBN
!a# $o an entiel" di,eent +ac2age- 7#- Concio he#el$ admitted on co##-examination to
having u#ed o execi#ed the ight o$ %#t e$u#al- She #tated that the li#t !a# not acce+table
and !a# indeed not acce+ted b" ABS-CBN- /el 0o#aio him#el$ 2ne! and unde#tood that ABS-
CBN ha# lo#t it# ight# o$ the %#t e$u#al !hen hi# li#t o$ 13 title# !ee e4ected-