G.R. No.

L-40597 June 29, 1979

AGUSTINO B. ONG YIU, petitioner, vs.
HONORABLE COURT OF APPEALS and PHILIPPINE AIR LINES, INC., respondents.

FACTS:
On august 26, 1967, Ong Yiu was a fare paying passenger of respondent PAL from Mactan, Cebu to Butuan
City wherein he was scheduled to attend a trial. As a passenger, he checked in one piece of luggae, blue
maleta for which he was issued a claim ticket. Upon arrival at Butuan City, petitioner claimed his luggage
but it could not be found. PAL Butuan sent a message to PAL Cebu which in turn sent a message to PAL
Manila that same afternoon. PAL Manila advised PAL Cebu that the luggage has been overcarried to Manila
and that it would be forwarded to PAL Cebu that same day. PAL Cebu then advised PAL Butuan that the
luggage will be forwarded the following day, on scheduled morning flight. This message was not received
by PAL Butuan as all the personnel had already gone for the day. Meanwhile, Ong Yiu was worried about
the missing luggage because it contained vital documents needed for the trial the next day so he wired PAL
Cebu demanding delivery of his luggage before noon that next day or he would hold PAL liable for damages
based on gross negligence. Early morning, petitioner went to the Butuan Airport to inquire about the luggage
but did not wait for the arrival of the morning flight at 10:00am. which carried his luggage. A certain Dagorro,
a driver of a colorum car, who also used to drive the petitioner volunteered to take the luggage to the
petitioner. He revelaed that the documents were lost. Ong Yiu demanded from PAL Cebu actual and
compensatory damages as an incident of breach of contract of carriage.

ISSUES:
1. Whether or not PAL is guilty of only simple negligence and not gross negligence?
2. Whether the doctrine of limited liability doctrine applies in the instant case?

RULING:
PAL had not acted in bad faith. It exercised due diligence in looking for petitioner’s luggage which had been
miscarried. Had petitioner waited or caused someone to wait at the airport for the arrival of the morning
flight which carried his luggage, he would have been able to retrieve his luggage sooner. In the absence of
a wrongful act or omission or fraud, the petitioner is not entitled to moral damages. Neither is he entitled to
exemplary damages absent any proof that the defendant acted in a wanton, fraudulent, reckless manner.

The limited liability applies in this case. On the presumed negligence of PAL, its liability for the loss however,
is limited on the stipulation written on the back of the plane

Ticket which is P100 per baggage. The petitioner not having declared a greater value and not having called
the attention of PAL on its true value and paid the tariff therefore. The stipulation is printed in reasonably
and fairly big letters and is easily readable. Moreso, petitioner had been a frequent passenger of PAL from
Cebu to Butuan City and back and he being a lawyer and a businessman, must be fully aware of these
conditions.