1 Cariaga v. Laguna Tayabas
133 of the Laguna Issues/Held:
Bus Company, G.R. No. L-
11037, 29 December 1960
 At about 1:00 pm, June 18, 1952, Bus No.
Tayabas Bus Company (LTB) bound for Lilio Laguna
(departing from Azcarriaga St., Manila) collided with the engine
of a train then passing by the national railroad tracks of the
poblacion of Bay, Laguna. One of the injured: Edgardo Cariaga
- 4th year medical student (UST).
- Sustained grave injuries; He was unconscious for 35 days,
and his right forehead was fractured in such a way that it
necessitated the removal of practically all of the right
frontal lobe of his brain. Under the testimony of Dr.
Fernandez (psychiatrist), Cariaga’s mental capacity has
been reduced to that he can no longer finish his studies.
Right frontal bone of his head was replaced by a tantalum
plate that when pressed in or dented in (the brain), could
cause Cariaga’s death. The gist of it is that he became an
invalid after the accident.
- LTB paid for the expenses in the hospitalization of
Cariaga.
 Cariaga (plus parents) filed a case against LTB and the Manila
Railroad Company (MRR Co.) for the recovery of P312,000.00
worth of actual, compensatory, moral and exemplary damages.
 Lower Court: Negligence of the bus driver that caused the
accident; sentenced LTB to pay Cariaga P10,490.00.
 Both the Cariaga and the LTB appealed.
- Cariaga: for awarding only P10K+ in compensatory
damages and not awarding them actual and moral
damages
- LTB: the fault should not have been bore by them alone;
MRR Co. should be included (collision: both because of
MRR Co. and bus driver).
Vol. 3 : February 24 Transportation Digests – Atty. Germaine Chua 1
Regarding LTB’s appeal:
 Untenable; all the witnesses on both side (LTB and MRR Co.)
swore that they heard the train whistle sometime before the
collision, but that it was the Bus that refused to slow down.
 LTB was unable to discredit MRR Co.’s witness that effect!
Regarding the Cariagas’ appeal:
 Compensatory damages of P10K+ is too low considering the
effects (and the evidence thereof) of said accident.
 LTB: Under A. 2201 of the CC, the damages for which the obligor,
guilty of a breach of contract but who acted in good faith, is liable
shall be for those that are the natural and probable consequences
of the breach and which the parties had forseen or could have
reasonably forseen at the time the obligation was constituted,
provided such damages, according to A. 2199 of the same code,
have been duly proved.
o Only the hospital expenses of P17,719.75 has been duly
proved
SC: The income of Cariaga had he finished his medical studies should
be considered too; could have been reasonably forseen by the parties
at the time Cariaga boarded the bus.
 Upon consideration of all facts, compensatory damages should
be increased to P25K.
 Moral damage and atty’s fees cannot be awarded:
o Current case not one of those contemplated in Art.
2219 that enumerated the instances such damage
can be awarded; cannot come under par. 2 thereon
because the present action is not one quasi-delict
(due to the pre-existing contractual relation between
Cariaga and LTB).
o Neither can LTB be held accountable for moral
damages under A. 2220 of the CC because LTB did
not act fraudulently or in bad faith and that LTB
exercised due diligence in the selection and
supervision of its buses in connection with the
discharge of their duties.
o Cachero vs Manila Yellow Taxi Cab:
 Not a liability arising from crime, because the
one who committed the offense is the driver.
 Liability = as a result of a breach of contract.
o Quasi-delict = for those obligations which do not arise
from law, contracts, quasi-contracts or criminal
 offenses.

2 Pangasinan Transportation  Aurora Breguera, Welly Pua and Memia Chua boarded Is evidence of defendant’s financial standing material in an action for
Co. v. Legaspi, G.R. No. L- Pantranco Bus No. 334, bound for the town of Alaminos driven breach of contract of carriage?
20916-17, 23 December 1964 by Arsenio Osorio.
SC: YES
[Bus collision, 3 died,  Before reaching Alaminos and just after rounding a blind curve,
Presentation of Documents] the bus collided with an oncoming passenger truck bus No. JBL Reyes: NO
306, likewise owned and operated by defendant (Pantranco),”
Reyes, Dissent: causing Bus No. 334 to turn turtle several times. COURT:
 Rule 28 permits “fishing for evidence”
 Dissented in so far as the  Aurora Breguera and the child Welly Pua (1 yo) suffered Under Section 1 of Rule 27 of the Revised Rules of Court, a party may
decision implies that injuries from which they died shortly after the accident, while ask for the production of documents, papers. books, accounts, letters,
inquiries into the Memia Chua (18yo) died instantaneously. photographs, objects or tangible things, not privileged, „which constitute
resources of a defendant or contain evidence material to any matter involved in the action and
would be permissible  In their complaints, respondents stated that PANTRANCO is which are in his possession, custody or control.
whenever damages, financially well-established having enormous assets and a
pecuniary or moral, are huge income.  Article 2206 of CC fixed minimum indemnity for death at
sought. 3000 which courts may increase
 Respondents asked the court to order the office manager
 Compensatory and moral of PANTRANCO to produce the company’s general ledgers  Regarding amount of damages: If common carrier can pay
damages can only be and financial statements for the years 1959, 1960 and a greater amount as demanded by circumstances, then it
awarded to indemnify the 1961, for respondents to inspect, examine or photograph. may be made to pay more.
victim or his relatives for A common carrier, if liable, must be made to pay the minimum amount.
the prejudice suffered,  Trial Court ordered PANTRANCO to make documents But if its financial ability is such that it can pay a greater amount of
and the financial available. indemnity as demanded by the circumstances of the case, then
standing of the person certainly it should be made to pay more than P3,000. Its financial
responsible is  PANTRANCO asked for reconsideration, but this was denied. standing in such a case is material.
irrelevant to their
evaluation.  Hence this petition for certiorari.  Request by Respondent was for a good cause
Respondents sought the production of the ledgers and financial
 Damages cannot be both DISSENT BY REYES statements of Pantranco in connection with their allegation that
nominal and actual at the But I must dissent in so far as the decision implies that inquiries into „defendant (Pantranco) is financially well-established having
same time (Civil Code, the resources of a defendant would be permissible whenever enormous .assets and a huge income.‰ That is why in the prayer of
Article 2221). damages, pecuniary or moral, are sought. We cannot lose sight of their complaints, they asked the court, not for the minimum indemnity of
the fact that the purpose of moral damages is essentially indemnity P3,000, but for such indemnity for the death of Aurora Breguera, Welly
 Civil Code doesn’t or reparation, not punishment or correction. Pua and Memia Chua, as the Court may find proper and reasonable.‰
mention any reference to Their request therefore was for a good cause and the respondent Judge
defendant’s pecuniary Moral damages are emphatically not intended to enrich a committed no abuse of discretion in granting it.
ability complainant at the expense of a defendant; they are awarded only
to enable the injured party to obtain means, diversions or PANTRANCO:
amusements that will serve to alleviate the moral suffering he has Documents are immaterial and irrelevant to the issue of negligence and
undergone, by reason of the defendant’s culpable action. that to allow their production would be to sanction inquisition or fishing
expedition into the financial records of the company.
In other words, the award of moral damages is aimed at a
restoration and must be proportionate to the suffering inflicted. [Baka itanong ni ma’am]
Q: What do courts consider in fixing a greater amount of indemnity?
Concurred with the denial of the writ; presentation of 1. Financial capacity of the common carrier
documents proper since corrective damages are at discretion Along with other factors:
of the court 2. the life expectancy of the deceased or beneficiary, whichever

Vol. 3 : February 24 Transportation Digests – Atty. Germaine Chua 2


3 Davila v. PAL, G.R. No. L-
28512, 28 February 1973
Corrective damages are at the discretion of the Court (Art. 2233),
the latter may properly inquire in this case into the pecuniary ability
of the defendant in order to determine what amount should be
added to the normal indemnity, to serve as effective deterrent to
induce defendant to exert more diligence and care in the future.
A small award of corrective damages would be ineffective for the
purpose if the defendant possessed ample means; or it might prove
excessive if the defendant were poor.
 23 Nov 1960: PAL’s passenger plane (DC-3 type, acquired in
1948) crashed on its way to Manila from Iloilo. Despite its age,
it has been certified as airworthy.
 Parents of the deceased Pedro T. Davila, Jr. had no definite
news of what had happened until they received a letter of
condolence (19 Dec 1960) from PAL’s president Soriano
informing them of their son’s death.
 29 Dec 1960: Body recovered and taken back to Iloilo
 RTC Iloilo ordered PAL to pay Davila et al the following:
o Death of Davila, Jr. – P6,000
o Loss of earning capacity (P12,000 per annum for 5
years) – P60,000
o Moral damages – P10,000
o Exemplary Damages – P10,000
o Actual damages – P5,000
 Rolex watch
 Pistol
 Burial expenses
 Lot and mausoleum
o Attorney’s fees – P10,000
 On appeal: Davila seeks an increase, while PAL seeks a
complete exoneration or at least a mitigation of liability
Vol. 3 : February 24 Transportation Digests – Atty. Germaine Chua 3
is shorter
3. pecuniary loss to the plaintiff or beneficiary,
4. loss of support,
5. loss of service,
6. loss of society,
7. mental suffering of beneficiaries, and
8. medical and funeral expenses.
PAL liable for violation of its K of carriage? If so, for how much?
YES.
The pilot did not follow the route prescribed for his flight, at least
between Romblon and Manila. Since up to that point over Romblon,
where he was supposed to intersect airway “Amber I,” the weather was
clear, the most reasonable conclusion is that his failure to do so was
intentional, and that he probably wanted to fly on a straight line to
Manila. It was a violation of air-traffic rules to which, under the
circumstances, the accident may be directly attributable.
 Death of Davila, Jr. – P6,000  P12,000
o Must be increased pursuant to current jurisprudence
 Loss of earning capacity (P12,000 per annum for 5 years) –
P60,000  P15,000 per annum, from 33.3 years to 25 years of
life expectancy
o As manager of a radio station (P9,100), a layer and junior
partner of his father in the law office (P3,600), and a
farmer (P3,000), the deceased had a gross earnings of
P15,000 a year.
o According to Art 2206, the defendant shall be liable for the
loss of the earning capacity of the deceased and
indemnity shall be paid to the heirs of the latter. This
article, while referring to “damages for death caused by
crime or QD,” is expressly made applicable by Art 1764 to
the “death of a passenger caused by the breach of
contract by a common carrier.”
o Although the deceased was in relatively good health, his
medical history shows that he had complained of and
been treated for such ailments as backaches, chest pains
and occasional feelings of tiredness. It is reasonable to
make an allowance for these circumstances and consider,
for purposes of this case, a reduction of his life
expectancy to 25 years.
 Moral damages – P10,000, retained
o The parents of the deceased are entitled to MD for their
mental anguish considering the long period of
uncertainty and suffering the plaintiffs underwent.
 Exemplary Damages – P10,000  DELETED

4 PAL v. CA, G.R. No. L-54470,
8 May 1990
 Starlight Flight No. 26 of the Philippine Air Lines (hereafter
PAL) took off from the Manduriao Airport in Iloilo, on its way to
Manila, with 33 persons on board, including the plane’s
complement.
 The plane had been certified as airworthy by the Civil
Aeronautics Administration.
 The plane did not reach its destination but crashed on Mt.
Baco, Mindoro, one hour and fifteen minutes after take-off.
 Among the fatalities was Nicanor Padilla who was a passenger
on the star-crossed flight.
 He was 29 years old, single. His mother, Natividad A. Vda. de
Padilla, was his only legal heir.
 Mrs. Padilla filed a complaint against PAL, demanding
payment of
o P600k as
 actual and compensatory damages,
 plus exemplary damages and
o P60k as attorney’s fees.
 PAL
o denied that the accident was caused by its negligence
or that of any of the plane’s flight crew,
o and that the damages sought were excessive and
speculative
 the deceased NICANOR PADILLA:
o graduated the Reserve Officer’s Course (Infantry
Basic Course) Armed Forces of the Philippines in
1949, and
o graduated with the degree of Bachelor of Literature in
1951 in Ateneo de Manila, and
o graduated with the degree of Bachelor of Laws in
1954, also in Ateneo de Manila
o he was a lawyer and he was associated with the law
offices of Senator Ambrosio Padilla, brother of his
father, Alberto R. Padilla.
o President and General Manager of the Padilla
Shipping Co., Inc.
Vol. 3 : February 24 Transportation Digests – Atty. Germaine Chua 4
o According to Art 2232, CC, in contracts and quasi-
contracts the court may award ED if the defendant acted
in a wanton, fraudulent, reckless, oppressive or
malevolent manner. The failure of the defendant here to
exercise EOD, as required by law, does not amount to
anyone of the circumstances contemplated in the said
provision.
 Actual damages – P5,000, sustained
o Rolex watch
o Pistol
o Burial expenses
o Lot and mausoleum
 Attorney’s fees – P10,000, retained
Whether the indemnity for the death of Nicanor A. Padilla should be
computed on the basis of his life expectancy rather than the life
expectancy of his only legal heir - YES
o resort to foreign jurisprudence would be proper only if no law or
jurisprudence is available locally to settle a controversy. Even in
the absence of local statute and case law, foreign jurisprudence is
only persuasive
o Under Article 1764 and Article 2206(1) of the Civil Code, the award
of damages for death is computed on the basis of the life
expectancy of the deceased, not of his beneficiary
o In the case of Davila vs. PAL, 49 SCRA 497 which involved the
same tragic plane crash, this Court determined not only PAL’s
liability for negligence or breach of contract, but also the manner of
computing the damages due the plaintiff therein which it based on
the life expectancy of the deceased
RE: ACTUAL DAMAGES
o PAL also contends that actual damages under Article 2206 of the
Civil Code must be proven by clear and satisfactory evidence is
correct
o SC: evidence was presented:
o The witnesses Mate (manager of Allied Overseas Trading
Company) and Reyes (auditor of Padilla Shipping
Company) were competent to testify on matters within
their personal knowledge because of their positions, such
as the income and salary of the deceased, Nicanor A.
Padilla
TRIAL COURT’S COMPUTATION
gross annual income= P23,100
based on
o his yearly salaries of P18,000 from the Padilla Shipping
Company
o and P5,100 from the Allied Overseas Trading Corporation.

5 De Caliston v. CA, G.R. No.
L-63135, 24 June 1983
o Vice- President and Treasurer of the Allied Overseas
Trading Co., Inc.
o member of the Board of Directors of the Junior
Chamber of Commerce (Jaycees) International and
Chairman of its Committee on Governmental Affairs
for the term 1960-1961.
 TRIAL COURT (CA affirmed)
o P447k as award for expected income
o P10k moral damages
o P10k atty’s fees
 PAL appealed to SC; contention:
o the principle of law generally recognized and applied
by the courts in the United State that “the controlling
element in determining loss of earnings arising from
death is, as established by authorities, the life
expectancy of the deceased or of the beneficiary,
whichever is shorter”
 Dalcamio ran over de Darrocha (a USVA pensioner), who died
instantly, while driving a passenger bus in Bacolod City.
 CFI: Convicted of homicide thru reckless imprudence and
ordered to pay De Caliston (de Darrocha’s daughter)
o P10,000 – loss of pension wc the deceased had
failed to receive
o P15,000 – death of the victim
o P5,000 – moral damages
o P5,000 – burial expenses
 CA: Deleted the P10,000 payment for loss of pension and
credited Dalmacio for P5,000 previously paid to De Caliston
under a vehicle insurance policy
Vol. 3 : February 24 Transportation Digests – Atty. Germaine Chua 5
Considering that he was single, the court deducted P9,200 as yearly
living expenses,
Resulting in a net income of P13,900 (not P15,900 as erroneously
stated in the decision)
Since Nicanor Padilla was only 29 years old and in good health, the trial
court allowed him a life expectancy of 30 years.
(net income of P13,900) x (his life expectancy of 30 years) = P417,000
(not P477,000) which is the amount of death indemnity due his mother
and only forced heir
MOTHER DIED BEFORE PROMULGATION OF SC DECISION! (sad
reacts only)
o because of the 16-year delay in the disposition of this case,
the private respondent herself has already joined her son in
the Great Beyond without being able to receive the indemnity
she well deserved.
o petitioner should pay legal rate of interest on the indemnity due
her. The failure of the trial court to award such interest
amounts to a plain error
SC: The petitioner is ordered to pay the private respondent or her heirs
death indemnity in the sum of P417,000 (not P477,000), with legal rate
of interest of 6% per annum from the date of the judgment on August
31, 1973, until it is fully paid. Costs
against the petitioner.
Was deleting the P10,000 payment for loss of pension proper?
NO.
The pension of the decedent being a sure income that was cut short by
her death for which Dalmacio was responsible, the surviving heir of the
decedent is entitled to the award of P10,000 which is just equivalent to
the pension the decedent would have received for one year if she did
not die.
The P5,000 paid to De Caliston by the insurer of the passenger bus
which figured in the accident may be deemed to have come from the
bus owner who procured the insurance. Since the civil liability (ex-
delicto) of the passenger bus for the death caused by his driver is
subsidiary and, at bottom, arises from the same culpa, the insurance
proceeds should be credited in favor of the errant driver.
6 De Lima v. LTB, G.R. No. L-  This is a petition for review on certiorari of the decision De
35697-99, 15 April 1988 Lima vs. Laguna Tayabas Co. of the Court of Appeals affirming
the decision of the court a quo with modification to include an
award of legal interest on the amounts adjudged in favor of the
petitioners from the date of the decision of the Court of
Appeals to the time of actual payment.
 June 3, 1958: A passenger bus of Laguna Tayabas Bus
Company and a delivery truck of Seven Up Bottling Co.,
Philippines collided causing the death of Petra Dela Cruz and
serious physical injuries to Eladia De Lima and Nemesio
Flores.
 Three suits were filed against the respondents before the Court
of First Instance of Laguna (San Pablo City)
 December 27, 1963: the court a quo rendered a decision in
favor of the plaintiffs specifying the indemnity afforded to them.
 Plaintiffs filed a motion for reconsideration on the decision by
the court a quo seeking award of legal interest on the adjudged
amount in their favor from the date of the said decision but
their motion was not acted upon by the said court.
 All of the plaintiffs desisted from appealing with the hope that
the defendant will comply with the indemnity. But instead, the
defendant filed an appeal in contrary to the motion for
reconsideration raised by the petitioners to the Court of
Appeals. This appeal was pending for around 30 years.
 December 1971: the petitioners filed a motion before the court
of Appeals seeking the grant of legal interest from the date of
the decision of the Court a quo and increasing the civil
indemnity (3k to 12k) for the death of Petra Dela Cruz.
 Appellate Court: denied the motion on the contention that the
petitioners failed to make an appeal on the error on lower
court’s ruling for not awarding the legal interest and damages.
 Supreme Court: granted the petition of the petitioners with
modifications on the amounts previously specified by the court
a quo.
Vol. 3 : February 24 Transportation Digests – Atty. Germaine Chua 6
1. Whether the Court of Appeals erred in granting legal interest on
damages to start only from the date of its decision instead of from the
date of the trial court’s decision? YES.
2. Whether the Court of Appeals erred in not increasing the indemnity
for the death of Petra de la? YES.
1. LEGAL INTEREST ON THE AMOUNTS ADJUDGED IN FAVOR OF
PETITIONERS SHOULD START FROM THE TRIAL COURT’S
DECISION
Petitioners: award of the legal rate of interest should be computed from
the promulgation of the decision of the trial court.
Respondents: having failed to appeal from the lower court’s decision
they are now precluded from questioning the ruling of the CA.
SC: The legal interest of six percent (6%) on the amounts adjudged in
favor of petitioners should start from the time of the rendition of the trial
court’s decision on December 27, 1963 instead of January 31,1972, the
promulgation of the decision of the Court of Appeals.
It is true that the rule is well-settled that a party cannot impugn the
correctness of a judgment not appealed from by him, and while he may
make counter assignment of errors, he can do so only to sustain the
judgment on other grounds but not to seek modification or reversal
thereof for in such case he must appeal. A party who does not appeal
from the decision may not obtain any affirmative relief from the
appellate court other than what he has obtained from the lower court, if
any, whose decision is brought up on appeal.
However, respondents failed to note that the legal interest was awarded
by the Appellate Court in its discretion based on equitable grounds,
which is duly sanctioned by Art. 2210 of the Civil Code which
provides—
“Interest may, in the discretion of the court, be allowed upon damages
awarded for breach of contract.”
This Court is inclined to adopt a liberal stance in this case as We have
done in previous decisions where We have held that litigations should,
as much as possible be decided on their merits and not on technicality.
The claim for legal interest and increase in the indemnity should be
entertained in spite of the failure of the claimants to appeal the
judgment.
2. CIVIL INDEMNITY FOR THE DEATH OF PASSENGERS PROPER,
BUT THE AMOUNT OF P3, 000 SHOULD BE INCREASED TO
P30,000 UNDER PREVAILING CIRCUMSTANCES

7 Sulpicio v. CA, G.R. No.
113578, 14 July 1995
 October 23, 1988: Tito Duran Tabuquilde (Tito) and his 3-year
old daughter Jennifer Anne (Anne) boarded the M/V Dona
Marilyn at North Harbor, Manila, bringing with them several
pieces of luggage.
 Storm Signal No. 2 had been raised by the PAG-ASA
authorities over Leyte as early as 5:30 P.M. of October 23,
1988 and which signal was raised to Signal No. 3 by 10 P.M
 ship captain ordered the vessel to proceed to Tacloban when
prudence dictated that he should have taken it to the nearest
port for shelter, thus violating his duty to exercise extraordinary
diligence in the carrying of passengers safely to their
destination
 October 24, 1988 morning: M/V Dona Marilyn, while in transit,
encountered inclement weather which caused huge waves due
to Typhoon Unsang.
 Angelina Tabuquilde contacted the Sulpicio Office to verify
radio reports that the vessel M/V Dona Marilyn was missing
 Sulpicio Lines assured her that the ship was merely "hiding"
thereby assuaging her anxiety
 October 24, 1988 2:00 P.M.: vessel capsized, throwing Tito
and Anne, along with hundreds of passengers, into the sea.
 Tito tried to keep himself and his daughter afloat but to no avail
as the waves got stronger and he was subsequently separated
from his daughter despite his efforts.
 October 25, 1988 11:00 A.M.: He found himself on Almagro
Island in Samar. He immediately searched for his daughter
among the survivors in the island, but failed.
 Angelina tried to seek the assistance of the Sulpicio Lines in
Manila to no avail.
 Angelina spent sleepless nights worrying about her husband
and daughter in view of the refusal of Sulpicio Lines to release
a verification of the sinking of the ship.
Vol. 3 : February 24 Transportation Digests – Atty. Germaine Chua 7
Civil indemnity for the death of Petra de la Cruz was properly awarded
by virtue of Art. 1764 in relation to Art 2206 of the Civil Code of the
Phiiippines which allows a minimum indemnity of P3.000.00 for the
death of a passenger caused by the breach of contract by a common
carrier.
In accordance with prevailing jurisprudence the indemnity of P3, 000.00
should be increased to P30,000.00 and not Pl2,000.00 as prayed for by
petitioner.
If the transportation company had only accepted the judgment of the
trial court and paid its just awards instead of appealing the same to the
Court of Appeals, no further delay would have been occasioned on the
simple issue of interest and indemnity. To mitigate the impact of such a
great delay in this case the Court finds ample justification in the
aforesaid award for interest and indemnity. We hope this relief is not too
late.
ISSUE: W/N Tito has a right to recover damage for his lost belongings
HELD:
NO.
 Decision of Court of Appeals is AFFIRMED with the
MODIFICATION that the award of P27,580.00 as actual damages
for the loss of the contents of the pieces of baggage is deleted and
that the award of P30,000.00 under Article 2206 in relation Article
1764 is increased to P50,000.00.
 There is no showing that the value of the contents of the lost pieces
of baggage was based on the bill of lading or was previously
declared by Tito before he boarded the ship
 Article 2206 of the Civil Code of the Philippines provides that only
deaths caused by a crime as quasi delict are entitled to actual and
compensatory damages without the need of proof of the said
damages
 The amount of damages for death caused by a crime or quasi
delict shall be at least Three Thousand Pesos, even though there
may have been mitigating circumstances…
 Deducing alone from said provision, one can conclude that
damages arising from culpa contractual are not compensable
without proof of special damages sustained by the heirs of the
victim.
 With respect to the award of moral damages, the general rule is
that said damages are not recoverable in culpa contractual except
when the presence of bad faith was proven
 in breach of contract of carriage, moral damages may be recovered
when it results in the death of a passenger
 With respect to the award of exemplary damages, Article 2232 of
the Civil Code of the Philippines gives the Court the discretion to
grant said damages in breach of contract when the defendant
acted in a wanton, fraudulent and reckless manner

8 Fores v. Miranda, G.R. No. L-
12163, 4 March 1959
Respondent Miranda was a
passenger in a jeep operated
by Petitioner Fores. The jeep
got involved in an accident,
and Miranda was injured. The
CFi awarded moral damages,
which Fores contested in the
SC. SC held that moral
damages cannot be awarded,
because there was no
showing of fraud or bad faith.
The liability of common
carriers is contractual;
therefore, there is a 
presumption of liability on the
part of the carrier, upon mere
proof of injury to the
passenger. They also cannot
escape liability by proving that
they exercised due diligence
in the selection and
supervision of their
employees. In addition, moral
damages cannot be awarded
in the absence of fraud or bad
faith on the part of the
 October 26, 1988: Tito and other survivors in the Almagro
Island were fetched and were brought to Tacloban Medical
Center for treatment
 October 31, 1988: Tito reported the loss of his daughter and
was informed that the corpse of a child with his daughter's
description had been found. Tito wrote a letter to his wife,
reporting the sad fact that Jennifer Anne was dead Angelina
suffered from shock and severe grief upon receipt of the news.
 November 3, 1988: coffin bearing the corpse of Anne was
buried.
 November 24, 1988: Tito filed a claim for damages against
Sulpicio Lines for the death of Anne and the loss of his
belongings worth P27,580.
 Trial Court ruled in favor of Tito:
1. actual damages, P30,000.00 for the death of Anne
2. P100,000.00 as moral damages
3. P50,000.00 as exemplary damages
4. P50,000.00 as attorney's fees, and costs
 CA affirmed.
 Miranda was one of the passengers on a jeepney driven by
Eugenio Luga. While the jeep was descending Sta. Mesa
bridge at an excessive speed, the driver lost control causing it
to swerve and hit the bridge wall.
 Five of the passengers were injured, including Miranda who
suffered a fracture of the upper right humerus. He was subject
to a series of operations yet at the time of the trial, he has not
yet recovered the use of his right arm.
 Luga was charged with serious physical injuries through
reckless imprudence, and upon interposing a plea of guilty,
was sentenced accordingly.
 It was alleged that the evidence failed to identify the vehicle but
this was rejected by the appellate court which found that the
jeep carried the plate no. TPU 1163, series of 1952 and
registered in the name of Paz Fores and that the vehicle had
the name of “Dona Paz” painted below the windshield.
There was no evidence presented to prove the contrary.
 Fores also said that she allegedly sold the jeep involved to a
Carmen Sackerman.
Vol. 3 : February 24 Transportation Digests – Atty. Germaine Chua 8
 The crew assumed a greater risk when, instead of dropping anchor
in or at the periphery of the Port of Calapan, or returning to the port
of Manila which is nearer, proceeded on its voyage on the
assumption that it will be able to beat and race with the typhoon
and reach its destination before it (Unsang) passes.
 The award of attorney's fees by the trial court to respondents is
also assailed by petitioner, citing Mirasol v. De la Cruz, 84 SCRA
337 (1978). In this case, the petitioner filed before the Municipal
Court an action for forcible entry against the private respondent.
The said court dismissed the complaint. On appeal, the Court of
First Instance of Camarines Sur sustained the decision of the lower
court, dismissed the appeal and awarded attorney's fees in the sum
of not less than P500.00 in favor of private respondent. Upon
appeal to us, we deleted the award of attorney's fees because the
text of the appealed decision was bereft of any findings of fact and
law to justify such an award. Moreover, there was no proof, other
than the bare allegation of harassment that the adverse party had
acted in bad faith. The aforementioned decision is inapposite to the
instant case where the decision clearly mentions the facts and the
law upon which the award of attorney's fees were based.
(1) Is the approval of the Public Service Commission necessary for the
sale of a public service vehicle even without conveying therewith the
authority to operate the same?
(2) To what damages is the respondent entitled?
HELD:
(1) Assuming the dubious sale to be a fact, the court of Appeals
answered the query in the affirmative. The ruling should be upheld. The
provisions of the statute are clear and prohibit the sale, alienation,
lease, or encumbrance of the property, franchise, certificate, privileges
or rights, or any part thereof of the owner or operator of the public
service Commission. The law was designed primarily for the protection
of the public interest; and until the approval of the public Service
Commission is obtained the vehicle is, in contemplation of law, still
under the service of the owner or operator standing in the records of the
Commission which the public has a right to rely upon.
(2) The P10,000 actual damages awarded by the Court of First Instance
of Manila were reduced by the Court of Appeals to only P2,000, on the
ground that a review of the records failed to disclose a sufficient basis
for the trial court's appraisal, since the only evidence presented on this
point consisted of respondent's bare statement that his expenses and
loss of income amounted to P20,000. On the other hand, "it cannot be
denied," the lower court said, "that appellee (respondent) did incur
expenses"' It is well to note further that respondent was a painter by
profession and a professor of Fine Arts, so that the amount of P2,000
 common carrier, unless a awarded cannot be said to be excessive. The attorney's fees in the sum
passenger dies (NCC 1763) of P3,000 also awarded to the respondent are assailed on the ground
that the Court of First Instance did not provided for the same, and since
no appeal was interposed by said respondent, it was allegedly error for
the Court of Appeals to award them motu proprio. Petitioner fails to note
that attorney's fees are included in the concept of actual damages
under the Civil Code and may be awarded whenever the court deems it
is just and equitable. We see no reason to alter these awards.

Anent the moral damages ordered to be paid to the respondent, the

same must be discarded. We have repeatedly ruled that moral
damages are not recoverable in damage actions predicted on a breach
of the contract of transportation. Where the injured passenger does not
die, moral damages are not recoverable unless it is proved that the
carrier was guilty of malice or bad faith. We think it is clear that the
mere carelessness of the carrier's driver does not per se constitute of
justify an inference of malice or bad faith on the part of the carrier; and
in the case at bar there is no other evidence of such malice to support
the award of moral damages by the Court of Appeals.

9 Phil. Rabbit Bus Lines v.  Patrocinio Esguerra (ESGUERRA) boarded Bus No. 223 of Was award of Moral damages and attorneys fees proper? Moral –
Esguerra, G.R. No. L-31420, Philippine Rabbit Bus Lines, Inc. (PR) bound for San Fernando Not Proper, Atty’s Fees - Proper
23 October 1982 at the Manila Terminal.
Moral Damages = Not recoverable, no bad faith on part of PR’s
[Amputated Arm, Sideswipe]  He sat at the left end of the 4th row behind the driver. driver.
 PR and Nicasio delos Reyes correct in saying that moral
Moral damages, not  While in San Marcos, Calumpit a freight truck owned by damages are not recoverable in actions for damages
Transport Contractors Inc (TRANSPORT) was coming from the predicated on a breach of the contract of transportation, as in
recoverable in actions for
opposite direction. The vehicles sideswiped each other at the instant case, in view of the provisions of Articles 2219 and
damages predicated on
the middle of the road. 2220 of the New Civil Code.
breach of contract of o EGR: [The exceptions are (1) where the mishap
transportation
 The glass near the drivers seat of the PR bus was detached results in the death of a passenger, and (2) where it is
and its left side was damaged. proved that the carrier was guilty of fraud or bad faith,
Attorney's fees, allowable in even if death does not result.]
the discretion of the court  The left forearm of Patrocinio Esguerra was hit by a hard blunt  There was no bad faith or fraud on the part of the carrier’s
object, breaking the bones into small fragments while the soft driver. That being the case no moral damages are recoverable
tissues of the muscles and the skin were mascerated.  The Court of Appeals found that the two vehicles sideswiped
each other at the middle of the road. In other words, both
 He was immediately brought to the Bulacan Provincial Hospital vehicles were in their respective lanes and that they did not
in Malolos, Bulacan for treatment. The left arm was amputated. invade the lane of the other. It cannot be said therefore that
there was fraud or bad faith on the part of the carrier's driver.
 ESGUERRA filed a case against PR , TRANSPORT and their This being the case, no moral damages are recoverable.
drivers praying that judgment be rendered in favor of the
plaintiff and against the defendants requiring them to pay, Attorney’s Fees: recoverable , need no proof, allowed in discretion
jointly and severally damages, actual and compensatory, moral of the court.
and exemplary, litigation expenses and costs.  Need not be proved as herein petitioners contended. The
same is allowed in the discretion of the court after considering
CFI: several factors which are discernible from the facts brought out

Vol. 3 : February 24 Transportation Digests – Atty. Germaine Chua 9


10 China Airlines v. IAC, G.R.
No. 73835, 17 January 1989
Dismissed complaint against Transport Contractors Inc and
Modesto Joaquin but sentenced defendants Nicasio de los Reyes
and PR jointly and severally to pay plaintiff
1. P25,085.40 as compensatory damages,
2. P5,000.00 as moral damages,
3. P2,000.00 as attorney's fees
4. and the costs of suit.
The cross-claim of defendants Philippine Rabbit Bus Lines, Inc. and
Transport Contractors, Inc. against each other are hereby
dismissed."
CA:
Transport Contractors, Inc. and Modesto Joaquin are ordered to
pay solidarity (sic) with the defendants- appellants PR and Nicasio
de los Reyes sums awarded in the judgment, with costs in this
instance against all the defendants.
PR and Nicasio delos Reyes:
Contend that the awards of
1. 5k moral damages is contrary to law and
2. 2k award of attys fees is bereft of legal and factual basis.
 14 Apr 1980: After a four-day delay caused by an engine
malfunction, Osorio boarded in Manila flight of China Airlines
for Taipei. Said flight, as originally scheduled, was to bring
Osorio and 9 others to Taipei in time for China Airlines’ flight
for LAX.
 As this schedule had been rendered impossible by the delay, it
was agreed, prior to departure from Manila that Osorio et al.
would spend the night in Taipei at China Airlines’ expense and
would be brought the following day to SF, where they would be
furnished an immediate flight connection to LAX.
 15 Apr 1980: No instructions having been received by the SF
Office due to the delay in transmission of the telex messages
from Manila, Osorio et al. were asked to deplane and wait
while contact with Manila was being made. This could not be
done immediately because of the time difference between the
2 places.
 Osorio et al. asked that they be provided food and overnight
accommodations as transit passengers, but were refused by
the passenger service agent, Dennis Cheng. Apparently irked
by this refusal + info that their luggage were not unloaded,
Osorio et al. left the SF office without leaving a contact
address.
 When word from Manila came at 6:45 PM authorizing issuance
of LAX tickets, Osorio et al. could not be informed thereof.
 16 Apr 1980: After spending the night at YMCA, paying a fee
of $5, Osorio learned thru her companions that her ticket for
LAX and luggage were ready for pick-up any time.
 17 Apr 1980: When Osorio decided to pick up her luggage and
Vol. 3 : February 24 Transportation Digests – Atty. Germaine Chua 10
during the trial. In this case, plaintiff was compelled to litigate
and incur expenses in order to protect his interest.
SC:
Petition is granted.
Decision of the CA sentencing herein petitioners to pay the sum of
P5,000.00, as moral damages set aside.
However, that portion of the decision sentencing petitioners to pay
respondent Patrocinio Esguerra the sum of P2,000.00, as attorney's
fees, stays.
Breach of contract?
YES, failing to secure an immediate flight connection for Osorio.
The reliance of China Airlines on the subject telex communications falls
short of the utmost diligence of a very cautious person expected of it,
thereby rendering it liable for its failure to abide by the promised
immediate connection.
However, breach not attended by gross negligence, recklessness,
or wanton disregard of the rights of the passenger.
Telex was the established mode of connection. Contact by telephone
not a practice due to time difference bw the two places. While Manila
office was aware of the possibility of the transmission delay, it had to
avail itself of this mode of communication.
Considering the gap of more than 24 hrs bw the time the telex
messages were sent out and Osorio’s expected arrival at SF, it was
unreasonable for China Airlines to expect that this time gap would cover
whatever delay might be encountered at the Hongkong link. While
China Airlines may have been remiss in its total reliance upon the telex
communications, and therefore negligent in view of the degree of
diligence required of it as a common carrier, such negligence cannot
under the obtaining circumstances be said to be so gross as to amount
to bad faith.
Liability?
Only actual damages. No award of moral damages.
Breach of contract incurred in good faith, thus liable for damages which
are the natural and probable consequences of said breach and which
 fly to LAX with a Western Airlines ticket wc she purchased for
$56. Osorio spent the night of Apr 16 in the house of Mrs.
Sim’s friend who did not charge anything. Bough only some
groceries for her hostess.
 Osorio filed a complaint for damages arising from breach of
contract.
 RTC: Absolved China Airles from liability, except for
o Reimbursement of $100 spent as an involuntarily
rerouted passenger in SF – P1,248
o SFC-LAX Western Airlines ticket - $56
 CA: Reversed RTC. Finding a breach of K of carriage, ordered
China Airlines to pay:
o Actual damages
o Moral damages – P100,000
o Exemplary damages – P200,000
o Attorney’s fees – P5,000
11 PAL v. Miano, G.R. No.  Florante Miano took PAL flight PR 722, Mabuhay Class, Whether the award of damages was proper – NO (except for the
106664, 8 March 1995 bound for Frankfurt, Germany. He had an immediate onward cost of transporting suitcase)
connecting flight via Lufthansa flight LH 1452 to Vienna, MORAL DAMAGES (deleted)
Austria
 At NAIA, he checked-in one brown suitcase weighing twenty
(20) kilograms but did not declare a higher valuation.
 He claimed that his suitcase contained money, documents,
one Nikkon camera with zoom lens, suits, sweaters, shirts,
pants, shoes, and other accessories
 upon arrival at Vienna his checked-in baggage was missing.
He reported the matter to the Lufthansa authorities.
 After three (3) hours of waiting in vain, he proceeded to
Piestany, Czechoslovakia.
 Eleven (11) days after his suitcase was delivered to him in his
hotel in Piestany, Czechoslovakia.
 He claimed that because of the delay in the delivery of his
suitcase, he was forced to borrow money to buy some clothes,
to pay $200.00 for the transportation of his baggage from
Vienna to Piestany, and lost his Nikkon camera.
 DEMAND LETTER TO PAL:
o P10K cost of allegedly lost Nikkon camera;
o $200 for alleged cost of transporting luggage from
Vienna to Piestany; and
o P100K as damages
 Miano instituted an action for damages before RTC Makati
 PAL CONTESTED COMPLAINT
o There was no report of mishandled baggage on flight
o nor a tracer telex received from its Vienna Station
(trace telex: action of any station that the airlines
operate from whom a passenger may complain or
have not received his baggage upon his arrival)
o if at all liable its obligation is limited by the Warsaw
Convention rate
Vol. 3 : February 24 Transportation Digests – Atty. Germaine Chua 11
the parties have foreseen at the time the obligation was constituted.
Their refusal to accede to her demands for a flight connection to Los
Angeles and/or food and hotel accommodations was due primarily to
lack of information or knowledge upon which to act upon and not from a
deliberate Intent to Ignore or disregard private respondent’s rights as a
passenger. They cannot be faulted for wanting to verify with Manila
private respondent’s status before acting upon her request as tickets for
Los Angeles cannot be used in going to San Francisco, and possession
of a ticket with Los Angeles as destination was not an indication that
one was a transit or an involuntarily re-routed passenger.
 trial court erred in awarding moral damages
 In breach of contract of carriage by air, moral damages are
awarded only if the defendant acted fraudulently or in bad
faith. Bad faith means a breach of a known duty through some
motive of interest or ill will
 The established facts evince that petitioner’s late delivery of
the baggage for eleven (11) days was not motivated by ill will
or bad faith. In fact, it immediately coordinated with its Central
Baggage Services to trace private respondent’s suitcase and
succeeded in finding it.
 records disclosed that Manila, the originating station, did not
receive any tracer telex
 Upon inquiry from their Frankfurt Station, it was however
discovered that the interline tag of Miano’s baggage was
accidentally taken off.
 it was customary for destination stations to hold a tagless
baggage until properly identified.
 The tracer telex, which contained information on the baggage,
is matched with the tagless luggage for identification. Without
the tracer telex, the color and the type of baggage are used as
basis for the matching. Thus, the delay.
 Worthy to stress, the trial court made an unequivocal
conclusion that petitioner did not act in bad faith or with malice.
 Bad faith must be substantiated by evidence. Bad faith under
the law cannot be presumed; it must be established by clear
and convincing evidence. Again, the unbroken jurisprudence is
that in breach of contract cases where the defendant is not
shown to have acted fraudulently or in bad faith, liability for
damages is limited to the natural and probable consequences
of the breach of the obligation which the parties had foreseen
  PAL filed a third-party complaint against Lufthansa German
Airlines imputing the mishandling of Miano’s baggage, but was
dismissed for its failure to prosecute.
 TRIAL COURT: no bad faith but awarded damages
o U.S. $200.00 as cost of transporting the suitcase from
Vienna to Czechoslovakia;
o P40k as moral damages;
o P20k as exemplary damages; and
o P15k as attorney’s fees.
or could reasonably have foreseen. The damages, however,
will not include liability for moral damages.
EXEMPLARY DAMAGES (deleted)
 The prerequisite for the award of exemplary damages in cases
of contract or quasi-contract is that the defendant acted in
wanton, fraudulent, reckless, oppressive, or malevolent
manner. The undisputed facts do not so warrant the
characterization of the action of PAL

ATTORNEY’S FEES (deleted)

 The award of attorney’s fees must also be disallowed for lack
of legal leg to stand on. The fact that private respondent was
compelled to litigate and incur expenses to protect and enforce
his claim did not justify the award of attorney’s fees.
 The general rule is that attorney’s fees cannot be recovered as
part of damages because of the policy that no premium should
be placed on the right to litigate.
 Petitioner is willing to pay the just claim of $200.00 as a result
of the delay in the transportation of the luggage in accord with
the Warsaw Convention. Needless to say, the award of
attorney’s fees must be deleted where the award of moral and
exemplary damages are eliminated.

12 Tan v. Northwest Airlines,  Priscilla Tan and Connie Tan boarded Northwest Airlines in Northwest liable for moral damages and exemplary damages for
Inc., G.R. No. 135802, 3 Chicago > Detroit (stop-over) > Philippines. willful misconduct and breach of contract of carriage?
March 2000  01 Jun 1994: Arrived at NAIA and found that their baggages NO.
were missing. Nothing in Northwest Airlines’ conduct showed that they were motivated
 02 Jun 1994: Returned to the airport and were informed that by malice or bad faith in loading the baggages on another plane. Due to
their baggages might still be in another plane in Tokyo, Japan. weight and balance restrictions, as a safety measure, Northwest
 03 Jun 1994: Recovered their baggages and discovered that Airlines had to transport the baggages on a different flight, but with the
some of its contents were destroyed and soiled. same expected date and time of arrival in the PHL. Northwest explained
 Tan’s demanded compensation for damages, claiming that that if there is an overload, i.e., a perceived safety risk, the aircraft’s
they suffered mental anguish, sleepless nights and great load will be reduced by off-loading cargo, which will then be placed on
damage bc of (1) Northwest’s failure to inform them in advance the next available flight.
that their baggages would not be loaded on the same flight
they boarded and bc of (2) their delayed arrival. For willful misconduct to exist, there must be a showing that the acts
 Northwest did not deny that the baggages were not loaded on complained of were impelled by an intention to violate the law, or were
the same flight. The baggages could not be carried on the in persistent disregard of one’s rights. It must be evidenced by a
same flight bc of weight and balance restrictions. However, flagrantly or shamefully wrong or improper conduct.
the baggages were loaded in another Northwest Airlines flight,
wc arrived PM of 02 Jun 1994. Bad faith does not simply connote bad judgment or negligence. It
 Northwest offered to either (1) reimburse the cost or repair of imports a dishonest or purpose or some moral obliquity and conscious
the bags; or (2) reimburse the cost for the purchase of new doing of a wrong, a breach of known duty through some motive or
bags, upon submission of receipts. interest or ill-will that partakes of the nature of fraud.
 RTC: Found Northwest Airlines liable for damages as follows
Where in breaching the contract of carriage the defendant airline is
o P15,000 – actual damages
not shown to have acted fraudulently or in bad faith, liability for
o P100,000 – moral damages
damages is limited to the natural and probable consequences of
o P50,000 – exemplary damages
Vol. 3 : February 24 Transportation Digests – Atty. Germaine Chua 12
 o P30,000 – attorney’s fees
 CA: Partially affirmed RTC by deleting the award of moral
and exemplary damages and reducing the attorney’s fees to
P10,000
13 Trans World Airlines v. CA, Rogelio A. Vinluan is a practicing lawyer who had to travel in April,
G.R. No. 78656, 30 August 1979 to several cities in Europe and the U.S. to attend to some
1988 matters involving several clients. He entered into a contract for air
carriage for valuable consideration with Japan Airlines first class
from Manila to Tokyo, Moscow, Paris, Hamburg, Zurich, New York,
Los Angeles, Honolulu and back to Manila thru the same airline and
other airlines it represents for which he was issued the
corresponding first class tickets for the entire trip.
April 18, 1979: while in Paris, he went to the office of Trans World
Airlines (TWA) at the De Gaulle Airport and secured therefrom
confirmed reservation for first class accommodation on board its
Flight No. 41 from New York to San Francisco which was
scheduled to depart on April 20, 1979. A validated stub was
attached to the New York-Los Angeles portion of his ticket
evidencing his confirmed reservation for said flight with the mark
"OK "
April 20, 1979:
8:00 o'clock A.M.: Vinluan reconfirrred his reservation for first class
accommodation on board TWA Flight No. 41 with its New York
office. He was advised that his reservation was confirmed. He was
even requested to indicate his seat preference on said flight on said
scheduled date of departure of TWA Flight No. 41.
9:45 o'clock A.M.: Vinluan presented his ticket for check-in at the
counter of TWA at JFK International Airport (ETD: 11:00am) He
was informed that there was no first class seat available for him on
the flight. He asked for an explanation but TWA employees on duty
declined to give any reason. When he began to protest, one of the
TWA employees, a certain Mr. Braam, rudely threatened him with
the words "Don't argue with me, I have a very bad temper."
Vinluan was compelled to take the economy seat offered to him
and he was issued a refund application" as he was downgraded
from first class to economy class.
While waiting for the departure of his flight, Vinluan noticed that
other passengers who were white Caucasians and who had
checked-in later than him were given preference in some first class
seats which became available due to "no show" passengers.
February 15, 1980: Vinluan filed an action for damages against
the TWA in the CFI of Rizal alleging breach of contract and bad
faith.
Vol. 3 : February 24 Transportation Digests – Atty. Germaine Chua 13
the breach of obligation which the parties had foreseen or could
have reasonably foreseen. In that case, such liability does not
include moral and exemplary damages.
WON the respondent Court of Appeals committed a grave abuse of
discretion in finding that petitioner acted maliciously and
discriminatorily, and in granting excessive moral and exemplary
damages and attorney's fees NO
award of moral and exemplary damages is proper
The contention is devoid of merit. Private respondent had a first class
ticket for Flight No. 41 of petitioner from New York to San Francisco on
April 20, 1979. It was twice confirmed and yet respondent
unceremoniously told him that there was no first class seat available for
him and that he had to be downgraded to the economy class. As he
protested, he was arrogantly threatened by one Mr. Braam. Worst still,
while he was waiting for the flight, he saw that several Caucasians who
arrived much later were accommodated in first class seats when the
other passengers did not show up. The discrimination is obvious and
the humiliation to which private respondent was subjected is
undeniable.
The petitioner’s inattention and lack of care for the interest of its
passengers amount to bad faith
Petitioner sacrificed the comfort of its first class passengers including
private respondent Vinluan for the sake of economy. Such inattention
and lack of care for the interest of its passengers who are entitled to its
utmost consideration, particularly as to their convenience, amount to
bad faith which entitles the passenger to the award of moral damages.
More so in this case where instead of courteously informing private
respondent of his being downgraded under the circumstances, he was
angrily rebuffed by an employee of petitioner.
Award of damages should serve as an example to discourage
repetition of similar oppressive and discriminatory acts
At the time of this unfortunate incident, the private respondent was a
practicing lawyer, a senior partner of a big law firm in Manila. He was a
director of several companies and was active in civic and social
organizations in the Philippines. Considering the circumstances of this
case and the social standing of private respondent in the community, he
is entitled to the award of moral and exemplary damages.
However, the moral damages should be reduced to P300,000.00, and
the exemplary damages should be reduced to P200,000.00.
 CFI: Defendant liable for:
1. amount representing the difference in fare between first
class and economy class accommodations on board Flight
No. 6041 from New York to San Francisco
2. P500,000.00 as moral damages
3. P300,000.00 as exemplary damages,
4. P100,000.00 as and for attorney's fees
5. all such amounts to earn interest at the rate of twelve
(12%) percent per annum from February 15, 1980 when
the complainant was filed until fully paid.

CA: MODIFIED:
1. fixing the interest which appellant must pay on the
awards of moral and exemplary damages at six per
cent (6%) per annum from the date of the decision a quo,
March 8, 1984 until date of full payment
2. reducing the attorney's fees to P50,000.00 without
interest
3. the rest of the decision is affirmed.

TWA: Because of maintenance problems of the aircraft on the day

of the flight, TWA Flight No. 41 was cancelled and a special Flight
No. 6041 was organized to operate in lieu of Flight No. 41. Flight
No. 41 was to have utilized a Lockheed 1011 with 34 first class
seats, but instead, a smaller Boeing 707 with only 16 first class
seats was substituted for use in Flight No. 6041. Hence,
passengers who had first class reservations on Flight No. 41 had to
be accommodated on Flight No. 6041 on a first-come, first-served
basis. An announcement was allegedly made to all passengers in
the entire terminal of the airport advising them to get boarding
cards for Flight No. 6041 to San Francisco and that the first ones
getting them would get first preference as to seats in the aircraft. It
denied declining to give any explanation for the downgrading of
private respondent as well as the discourteous attitude of Mr.
Braam.

Vinluan: He did not hear such announcement at the terminal and

that he was among the early passengers to present his ticket for
check-in only to be informed that there was no first class seat
available for him and that he had to be downgraded.

14 Alitalia Airways, Inc. v. CA,
G.R. No. 77011, 24 July 1990
 Spouses Jose and Victoria Juliano, arrived at the Fumicino
Airport in Rome, Italy in order to board Flight AZ 1774 of
Alitalia Airways scheduled to depart at 10:30 a.m. for
Hongkong.
 However, Flight AZ 1774 left Rome without the Julianos. When
private respondent Jose O. Juliano arrived in Manila, he
returned to his employer Bristol-Myers, Inc., of which he was
Whether there exists factual or legal basis for the award of moral and
exemplary damages and attorney's fee
YES.
 The Court has consistently affirmed that review of the findings of
fact of the Court of Appeals is not a function that it ordinarily
undertakes such findings being as a nile binding and conclusive.

Vol. 3 : February 24 Transportation Digests – Atty. Germaine Chua 14

 Vice-President for Operations, the unused Rome-Hongkong
leg of the Alitalia ticket. However, the cost of the Thai Airways
tickets they had to purchase in lieu of Alitalia was not refunded
by his office.
 The Julianos filed a complaint with the Regional Trial Court of
Quezon City against the petitioner for damages from the
alleged breach of its contractual obligations when the petitioner
failed to transport the private respondent to Hongkong on the
Alitalia Flight AZ 1774.
 According to Alitalia, boarding time was 9:30 o'clock in the
morning for Flight AZ 1774. The check-in counter was then
closed and all confirmed passengers who failed to check-in
before that time were marked as NO SHOW in the airline
manifest as in the case of the Julianos. Thereafter, chance
passengers, or those without confirmed reservations, were
allowed to board.
 On the other hand, the Julianos claim that, having left the hotel
right after breakfast at 6:30 o'clock in the morning, they arrived
at the airport at around 9:15 o'clock in the
morning. Notwithstanding this timely arrival at the airport, the
Julianos had to contend with a long queue for the check-in
because there were no individual counters specifically for
Alitalia passengers.
 Realizing that it was already close to boarding time, the
Julianos, armed with confirmed tickets, decided to approach
the check-in counter.At the counter, a lady employee only
brushed them aside and ordered them to fall in line, which they
did.
 At any rate, they were getting restless because the lines were
no longer moving, so they decided to call the attention of the
airline authorities.
 To make matters worse, the herein petitioner allegedly began
to discriminate. The Julianos noticed that despite the fact that
their line was not moving, some of the passengers were being
escorted ahead of the line in order to be checked-in.
 For the second time, the Julianos approached the lady at the
counter to explain that they would miss the flight if they were
not checked in.
 It was then that the Julianos ran into Ms. Chuchi Estanislao, an
employee of the University of the Philippines Asian Institute of
Tourism, who could not also check in. Together with Ms.
Estanislao, they approached the Alitalia employee wearing a
uniform with the tag "supervisor". He only shrugged when
shown the confirmed tickets and said that the Julianos should
try to check-in already because it was near departure time.
 Lower court found Alitalia to have overbooked in order to
ensure that all seats will be taken As a consequence, some of
the passengers in Rome has to be "bumped off to
accommodate the passengers embarking at the rest of the leg
of the trip. In fact more passengers were picked up by the
Vol. 3 : February 24 Transportation Digests – Atty. Germaine Chua 15
 Thus we re-affirm the ruling laid down by the Court in a long line of
cases that when an airline issues a ticket to a passenger confirmed
on a particular flight, on a certain date, a contract of carriage
arises, and the passenger has every right to expect that he would
fly on that flight and on that date. If he does not, then the carrier
opens itself to a suit for breach of contract of carriage.
 Accordingly, the respondent court erred in holding that the Julianos
are not entitled to a refund because the purchase of the Thai
Airways tickets was unnecessary.
 It was already too much of a coincidence that, at Fumicino Airport,
the Julianos would find another Filipino, in the person of Ms.
Estanislao, in the same predicament that they were in. What is
plain to see is that the airline had deliberately overbooked and in
doing so took the risk of having to deprive some passengers of
their seats in case all of them would show up for check-in.
 That Alitalia had no intention to accommodate all who had
'confirmed their flight reservations could be seen in the absence of
any measure to contract all possible passengers for each flight who
might be within the airport premises. As a result, some passengers
would really be left behind in the long and disorderly queue at the
check-in counter.
 Common carriers, like commercial airlines, are in the business of
rendering service, which is the primary reason for their recognition
in our law. They can not be allowed to disregard our laws as if they
are doing the passengers any favor by accommodating them.
 Because the passengers in a contract of carriage do not contract
merely for transportation, they have a right to be treated by the
carrier's employees with kindness, respect, courtesy, and
consideration. Hence the justification why passengers must be
spared from the indignity and inconvenience of being refused a
confirmed seat on the last minute.
 As held in Trans World Airlines v. Court of Appeals, such
inattention to and lack of care [by the petitioner airline] for the
interest of its passengers who are entitled to its utmost
consideration, particularly as to their convenience, amount to bad
faith which entitles the passenger to the award of moral
damages. Ergo, we affirm the respondent court's award of moral
damages at P200.000.00. This award should be sufficient to
indemnify the Julianos for the delay, inconvenience, humiliation,
and embarrassment they suffered.
 Likewise the award of exemplary damages is well-grounded. With
dismay, we note, that the imposition of substantial amounts of
damages notwithstanding, international carriers have not been
dissuaded from repeating similar derogatory acts.
 Nonetheless, we agree with the injunction expressed by the Court
of Appeals that passengers must not prey on international airlines
for damage awards, like "trophies in a safari." After all neither the
social standing nor prestige of the passenger should determine the
extent to which he would suffer, because of a wrong done, since
the dignity affronted in the individual is a quality inherent in him and
 same flight as it proceeded to Athens, Bangkok, and then
Hongkong.
 Thus, the lower court adjudged Alitalia liable for damages:
o U.S. $2,065.00 as actual damages payable in
Philippine Currency at the official rate of exchange at
the time of payment;
o P400,000.00 as moral damages;
o P50,000.00 as attorney's fees, Costs.
 This decision was motu proprio amended by the trial court on
September 19, 1984 to include the award of P50,000.00 as
exemplary damages.
 Both parties appealed.
 The respondent Court of Appeals modified the judgment as
follows:
o reducing the award of moral damages to
P200,000.00;
o reducing the award of exemplary damages to
P25,000.00; and
o reducing attorney's fees to P 30,000.00, the rest of
the decision is maintained.
15 Zalamea v. CA, G.R. No.  Petitioners-spouses Cesar Zalamea and Suthira Zalamea, and
104235, 18 November 1993 their daughter, Liana purchased 3 airline tickets from the
Manila agent of respondent TransWorld Airlines, Inc. for a flight
to New York to Los Angeles. The tickets of petitioners-spouses
were purchased at a discount of 75% while that of their
daughter was a full fare ticket. All three tickets represented
confirmed reservations.
 On the appointed date, however, petitioners checked in but
were placed on the wait-list because the number of
passengers who had checked in before them had already
taken all the seats available on the flight. Out of the 42 names
on the wait list, the first 22 names were eventually allowed to
board the flight to Los Angeles, including petitioner Cesar
Zalamea. The two others were not able to fly. Those holding
full-fare tickets were given first priority among the wait-listed
passengers. Mr. Zalamea, who was holding the full-fare ticket
of his daughter, was allowed to board the plane; while his wife
and daughter, who presented the discounted tickets were
denied boarding.
 Even in the next TWA flight to Los Angeles Mrs. Zalamea and
her daughter, could not be accommodated because it was also
fully booked. Thus, they were constrained to book in another
flight and purchased two tickets from American Airlines. Upon
their arrival in the Philippines, petitioners filed an action for
Vol. 3 : February 24 Transportation Digests – Atty. Germaine Chua 16
not conferred by these social indicators. Thus, as well and aptly put
by Justice Serafin Camilon, in his ponencia in this case, the
 ... Propriety of damage awards is judged by their fairness
considering all the circumstances. A man's stature is but an
accident of life. The role it plays is secondary to the concepts of
justice and fair play.
 Nevertheless we have noted the proliferation of similar offenses by
international carriers finding their way to this Court; we have to
advocate a punitive stands to stem, if not totally eliminate, this
deplorable tide. In the discretion of the Court, the award of
exemplary damages should be increased to P200,000.00.
WHEREFORE, the decision of the respondent court is MODIFIED in
that the petitioner Alitalia Airways is hereby ordered to pay the private
respondents Jose O. Juliano and Victoria G. Juliano the following
amounts:
1) U.S.$2,065.00 as actual damages, payable in Philippine Currency at
the official rate of exchange at the time of payment;
2) P200,000.00, as and for moral damages;
3) P200,000.00, as and for exemplary damages; and
4) P30,000.00, as attorney's fees.
Costs against the petitioner.
SO ORDERED.
WON TWZ acted with bad faith and would entitle Zalameas to Moral
and Exemplary damages.
The U.S. law or regulation allegedly authorizing overbooking has never
been proved. Foreign laws do not prove themselves nor can the courts
take judicial notice of them. Like any other fact, they must be alleged
and proved. Written law may be evidenced by an official publication
thereof or by a copy attested by the officer having the legal custody of
the record, or by his deputy, and accompanied with a certificate that
such officer has custody. The certificate may be made by a secretary of
an embassy or legation, consul general, consul, vice-consul, or
consular agent or by any officer in the foreign service of the Philippines
stationed in the foreign country in which the record is kept, and
authenticated by the seal of his office.
Respondent TWA relied solely on the statement of Ms. Gwendolyn
Lather, its customer service agent, in her deposition that the Code of
Federal Regulations of the Civil Aeronautics Board allows overbooking.
No official publication of said code was presented as evidence. Thus,
respondent court’s finding that overbooking is specifically allowed by
the US Code of Federal Regulations has no basis in fact.
Even if the claimed U.S. Code of Federal Regulations does exist, the
same is not applicable to the case at bar in accordance with the
principle of lex loci contractus which require that the law of the place
where the airline ticket was issued should be applied by the court where
the passengers are residents and nationals of the forum and the ticket
is issued in such State by the defendant airline. Since the tickets were
damages based on breach of contract of air carriage before the
RTC- Makati. The lower court ruled in favor of petitioners . CA
held that moral damages are recoverable in a damage suit
predicated upon a breach of contract of carriage only where
there is fraud or bad faith. Since it is a matter of record that
overbooking of flights is a common and accepted practice of
airlines in the United States and is specifically allowed under
the Code of Federal Regulations by the Civil Aeronautics
Board, no fraud nor bad faith could be imputed on respondent
TransWorld Airlines. Thus petitioners raised the case on
petition for review on certiorari.
Vol. 3 : February 24 Transportation Digests – Atty. Germaine Chua 17
sold and issued in the Philippines, the applicable law in this case would
be Philippine law.
Existing jurisprudence explicitly states that overbooking amounts to bad
faith, entitling the passengers concerned to an award of moral
damages. In Alitalia Airways v. Court of Appeals, where passengers
with confirmed bookings were refused carriage on the last minute, this
Court held that when an airline issues a ticket to a passenger confirmed
on a particular flight, on a certain date, a contract of carriage arises, and
the passenger has every right to expect that he would fly on that flight
and on that date. If he does not, then the carrier opens itself to a suit for
breach of contract of carriage. Where an airline had deliberately
overbooked, it took the risk of having to deprive some passengers of
their seats in case all of them would show up for the check in. For the
indignity and inconvenience of being refused a confirmed seat on the
last minute, said passenger is entitled to an award of moral damages.
For a contract of carriage generates a relation attended with public duty
— a duty to provide public service and convenience to its passengers
which must be paramount to self-interest or enrichment.
Respondent TWA is still guilty of bad faith in not informing its
passengers beforehand that it could breach the contract of carriage
even if they have confirmed tickets if there was overbooking.
Respondent TWA should have incorporated stipulations on overbooking
on the tickets issued or to properly inform its passengers about these
policies so that the latter would be prepared for such eventuality or
would have the choice to ride with another airline.
Respondent TWA was also guilty of not informing its passengers of its
alleged policy of giving less priority to discounted tickets. Neither did it
present any argument of substance to show that petitioners were duly
apprised of the overbooked condition of the flight or that there is a
hierarchy of boarding priorities in booking passengers. It is evident that
petitioners had the right to rely upon the assurance of respondent TWA,
thru its agent in Manila, then in New York, that their tickets represented
confirmed seats without any qualification. The failure of respondent
TWA to so inform them when it could easily have done so thereby
enabling respondent to hold on to them as passengers up to the last
minute amounts to bad faith. Evidently, respondent TWA placed its self-
interest over the rights of petitioners under their contracts of carriage.
Such conscious disregard of petitioners’ rights makes respondent TWA
liable for moral damages. To deter breach of contracts by respondent
TWA in similar fashion in the future, we adjudge respondent TWA liable
for exemplary damages, as well.
In the case of Alitalia Airways v. Court of Appeals, this Court explicitly
held that a passenger is entitled to be reimbursed for the cost of the
tickets he had to buy for a flight to another airline. Thus, instead of
simply being refunded for the cost of the unused TWA tickets,

16 Sarkies Tours v. IAC, G.R.
No. L-63723, 2 September
1983
17 R Transport Corp. v. Eduardo
Pante, G.R. No. 162104, 15
September 2009
18 Sulpicio Lines v. Domingo E.
Curso, G.R. No. 157009, 17
March 2010
19 Philippine Hawk v. Vivian Tan
Lee, G.R. No. 166869, 16
February 2010
20 Air France v. Gillego, G.R.
No. 165266, 15 December
2010
 Gillego, a congressman left Manila on board Air France’s
aircraft bound for Paris, France. He was to attend as a keynote
speaker in a conference to be held in Budapest, Hungary and
Tokyo, Japan.
 When in Paris, he arranged for an earlier connecting flight to
Budapest. When he arrived in Budapest, he was not able to
locate his luggage. Despite assurance that it would be
delivered to him and repeated follow-ups, he did not recover
his luggage. It contained his personal effects such as clothes,
toiletries, medicines for his hypertension, and the speeches he
had prepared, including the notes and reference materials he
needed for the conference.
 When he returned to Manila, he followed up about his luggage
but was ignored.
 July 13, 1993: Gillego filed a complaint for damages against
Air France.
a. He asserted that as a common carrier which advertises
and offers its services to the public, Air France is
under obligation to observe extraordinary diligence in the
vigilance over checked-in luggage and to see to it
that his luggage entrusted to petitioner’s custody
would accompany him on his flight and/or could be
claimed by him upon arrival at his point of
destination or delivered to him without delay.
Vol. 3 : February 24 Transportation Digests – Atty. Germaine Chua 18
petitioners should be awarded the actual cost of their flight from New
York to Los Angeles.
WHEREFORE, the petition is hereby GRANTED and the decision of the
respondent Court of Appeals is hereby MODIFIED
a. Was there legal and factual basis that Air France's actions were
attended by gross negligence, bad faith and willful misconduct and that
it acted in a wanton, fraudulent, reckless, oppressive or malevolent
manner to justify award of moral and exemplary damages?
b. Is the amount of damages awarded by the RTC and affirmed by the
CA as moral and exemplary damages excessive, unconscionable and
unreasonable?
a. Yes, a business intended to serve the travelling public primarily, a
contract of carriage is imbued with public interest. The law governing
common carriers consequently imposes an exacting standard. Article
1735 of the Civil Code provides that in case of lost or damaged goods,
common carriers are presumed to have been at fault or to have acted
negligently, unless they prove that they observed extraordinary
diligence as required by Article 1733. Thus, in an action based on a
breach of contract of carriage, the aggrieved party does not have to
prove that the common carrier was at fault or was negligent. All that he
has to prove is the existence of the contract and the fact of its non-
performance by the carrier.
That respondent’s checked-in luggage was not found upon arrival at his
destination and was not returned to him until about two years later is not
disputed. The action filed by the respondent is founded on such breach
of the contract of carriage with petitioner who offered no satisfactory
explanation for the unreasonable delay in the delivery of respondent’s
baggage. The presumption of negligence was not overcome by the

b. He claimed for actual damages ($2,000.00 or P40,000),
moral damages (P1,000,000), exemplary damages
(P500,000), attorney’s fees (P50,000) and costs of suit.
 Air France:
a. Its liability for lost checked-in baggage is governed by the
Warsaw Convention for the Unification of Certain Rules
Relating to International Carriage. Under the said treaty,
its liability for lost or delayed registered baggage of
respondent is limited to 250 francs per kilogram or
US$20.00, which constitutes liquidated damages and
hence Gillego is not entitled to any further damage.
b. It has taken all necessary measures to avoid loss of
Gillego’s baggage, the contents of which he did not
declare, and that it has no intent to cause such loss, much
less knew that such loss could occur.
c. The loss of luggage is due to or occasioned by force
majeure or fortuitous event or other causes beyond the
carrier’s control. Diligent, sincere and timely efforts were
exerted to locate the missing luggage.
d. The claims for actual, moral and exemplary damages and
attorney’s fees therefore have no basis in fact and in law,
and are, moreover speculative and unconscionable.
 RTC: Air France is grossly negligent for failing to deliver the
luggage and ignoring Gillego’s follow-ups. Air France is liable
to pay:
a. 1 million as moral damages
b. 500,000 as exemplary damages
c. 50,000 as attorney’s fees
petitioner and hence its liability for the delay was sufficiently
established. However, upon receipt of the said luggage during the
pendency of the case in the trial court, respondent did not anymore
press on his claim for actual or compensatory damages and neither did
he adduce evidence of the actual amount of loss and damage incurred
by such delayed delivery of his luggage. Consequently, the trial court
proceeded to determine only the propriety of his claim for moral and
exemplary damages, and attorney’s fees.
b. In awarding moral damages for breach of contract of carriage, the
breach must be wanton and deliberately injurious or the one
responsible acted fraudulently or with malice or bad faith. Not every
case of mental anguish, fright or serious anxiety calls for the award of
moral damages. Where in breaching the contract of carriage the airline
is not shown to have acted fraudulently or in bad faith, liability for
damages is limited to the natural and probable consequences of the
breach of the obligation which the parties had foreseen or could have
reasonably foreseen. In such a case the liability does not include moral
and exemplary damages.
In repeatedly ignoring respondent’s inquiries, petitioner’s employees
exhibited an indifferent attitude without due regard for the
inconvenience and anxiety he experienced after realizing that his
luggage was missing. Petitioner was thus guilty of bad faith in
breaching its contract of carriage with the respondent, which entitles the
latter to the award of moral damages. However, we agree with
petitioner that the sum of ₱1,000,000.00 awarded by the trial court is
excessive and not proportionate to the loss or suffering inflicted on
the passenger under the circumstances.

 CA affirmed the ruling of the trial court.

21 Cruz v. Sun Holidays, Inc.,

G.R. No. 186312, 29 June
2010

22 Tan v. OMC Carriers, Inc.,
G.R. No. 190521, 12 January
2011
Respondent OMC Carriers owned a truck, driven by respondent
Arambala, which crashed into the home of petitioners Tan when its
braking mechanism failed. This caused the death of the head of the
family, Celedonio Tan. The Tans went to court to demand damages
due to the negligence of OMC. OMC counters that the truck went
out of control because of motor oil spilled on the road. The RTC
found OMC to be liable, that the brake of the truck malfunctioned,
and that there was no motor oil which caused the accident. The
driver, Aramballa, abandoned the truck when the brakes did not
work which caused the truck to slam into the home of the Tans. The
RTC awarded actual damages, both on the loss of property and
Vol. 3 : February 24 Transportation Digests – Atty. Germaine Chua 19
Whether or not:
a) the reduction of actual damages for loss of property was proper;
b) the removal of actual damages for loss of earning capacity was
proper; and
c) whether or not the reduction of exemplary damages was proper.
Civil Law: Temperate damages are awarded when the exact amount of
damages is unknown. The petitioners clearly suffered damages. Their
home and property were damaged. The provider of the family passed
away. It is clear and undisputed that they did suffer losses. However,
since the value of the properties damaged could not be determined with
 earning capacity of Celedonio. Exemplary damages were also
awarded. Upon appeal to the Court of Appeals, the actual damages
for loss of property was reduced as they were insufficiently
substantiated. The damages for loss of earning capacity was
deleted for being totally unsubstantiated. The Tans were unable to
present documents to ascertain the amount of earning capacity
lost. Exemplary damages were also reduced.
23 People of the Philippines v.
Sanchez, G.R. Nos. 121039,
18 October 2001
Vol. 3 : February 24 Transportation Digests – Atty. Germaine Chua 20
certainty because of the nature of the property, temperate damages are
in order. Also, even if there are no documents supporting the earning
capacity of the deceased, the damage caused is still undisputed.
Temperate damages must be awarded. The reduction of exemplary
damages are proper as exemplary damages are not meant to enrich or
reduce another party to poverty.
Consistent with pertinent jurisprudence, the interest on these awards
must be computed from the date when the RTC rendered its decision in
the civil case, or on June 17, 2008, as it was at this time that a
quantification of the damages may be deemed to have been reasonably
ascertained.