July 30, 2003
FACTS:
On September 18, 1981, Daniel Chiok bought a roundtrip Manila-Taipei-Hong Kong-Manila ticket from China Airlines, endorsable to Philippine Airlines.
On November 21, 1981, Chiok took his trip from Manila to Taipei using the China Airlines ticket. Before he left for said trip, the trips covered by the ticket were pre-scheduled and confirmed by China Airline.
Upon arrival in Taipei, he went to the China Airlines office and confirmed his Hong Kong to Manila trip on board PAL Flight No. PR 311. The China Airlines office attached a yellow sticker appropriately indicating that his flight status was OK.
Upon arrival in Hong Kong, he went to the PAL office and sought to reconfirm his flight back to Manila. The PAL office confirmed his return trip on board Flight No. PR 311 and attached its own sticker.
Due to a typhoon in Manila, however, flight PR 311 was cancelled. Chiok was informed that all the confirmed ticket holders of PAL Flight No. PR 311 were automatically booked for its next flight, which was to leave the next day. He then informed PAL personnel that, being the founding director of the Philippine Polysterene Paper Corporation, he had to reach Manila on November 25, 1981 because of a business option which he had to execute on said date, to no avail.
On November 25, 1981, Chiok went to the airport. Cathay Pacific stewardess Lok Chan had taken and received Chiok's plane ticket and his luggage. Lok called the attention of Carmen Chan, PAL's terminal supervisor, and informed the latter that Chiok's name was not in the computer list of passengers. Subsequently, Carmen informed Chiok that his name did not appear in PAL's computer list of passengers and therefore could not be permitted to board PAL Flight No. PR 307.
Meanwhile, Chiok requested Carmen to put into writing the alleged reason why he was not allowed to take his flight. The latter then wrote the following, to wit: PAL STAFF CARMEN CHAN CHKD WITH R/C KENNY AT 1005H NO SUCH NAME IN COMPUTER FOR 311/24 NOV AND 307/25 NOV. The latter sought to recover his luggage but found only two which were placed at the end of the passenger's line. Realizing that his new Samsonite luggage was missing, which contained cosmetics worth HK$14,128.80, he complained to Carmen.
Thereafter, Chiok proceeded to PAL's Hong Kong office and confronted PAL's reservation officer, Carie Chao, who previously confirmed his flight back to Manila. Chao told Chiok that his name was on the list and pointed to the latter his computer number listed on the PAL confirmation sticker attached to his plane ticket, which number was R/MN62.
Chiok then decided to use another China Airlines ticket and asked Chao if this ticket could be used to book him for the said flight. The latter, once again, booked and confirmed the former's trip, this time on board PAL Flight No. PR 311 scheduled to depart that evening. Later, Chiok went to the PAL check-in counter and it was Carmen who attended to him. As this juncture, Chiok had already placed his travel documents, including his clutch bag, on top of the PAL check-in counter.
Thereafter, Carmen directed PAL personnel to transfer counters. In the ensuing commotion, Chiok lost his clutch bag containing the following, to wit: (a) $2,000.00; (b) HK$2,000.00; (c) Taipei $8,000.00; (d) P2,000.00; (e) a three-piece set of gold (18 carats) cross pens valued at P3,500; (f) a Cartier watch worth about P7,500.00; (g) a tie clip with a garnet birthstone and diamond worth P1,800.00; and (h) a [pair of] Christian Dior reading glasses. Subsequently, he was placed on stand-by and at around 7:30 p.m., PAL personnel informed him that he could now check-in.
Subsequently, Chiok filed a complaint for damages against PAL and China Airlines. He alleged that despite several confirmations of his flight, PAL refused to accommodate him in Flight No. 307, for which reason he failed to arrive in Manila on time to attend a business matter. He also alleged that PAL's personnel, specifically Carmen, ridiculed and humiliated him in the presence of so many people. Further, he alleged that defendants are solidarily liable for the damages he suffered, since one is the agent of the other.
RTC held China Airlines and PAL jointly and severally liable to Chiok. The CA affirmed the RTC's ruling, but deleted the award for actual damages because neither the piece of luggage nor the clutch bag had been checked in for transport to PAL.
ISSUE:
Whether China Airlines can be held liable for the negligence and error of PAL. -- YES.
Whether Chiok is entitled to moral and exemplary damages. -- YES.
HELD:
Article 1, Section 3 of the Warsaw Convention states: "Transportation to be performed by several successive air carriers shall be deemed, for the purposes of this Convention, to be one undivided transportation, if it has been regarded by the parties as a single operation, whether it has been agreed upon under the form of a single contract or of a series of contracts, and it shall not lose its international character merely because one contract or a series of contracts is to be performed entirely within a territory subject to the sovereignty, suzerainty, mandate, or authority of the same High Contracting Party."
On the subject of moral damages, the general rule is that moral damages are not to be awarded in contracts involving breaches of carriage.The exceptions to these are Art. 1764 and Art. 2220 of the Civil Code.
Art. 1764 provides: "Article 1764. Damages in cases comprised in this Section shall be awarded in accordance with Title XVIII of this Book, concerning Damages. Article 2206 shall also apply to the death of a passenger caused by the breach of contract by a common carrier."
Meanwhile, Art. 2220 provides: "Willful injury to property may be a legal ground for awarding moral damages if the court should find that, under the circumstances, such damages are justly due. The same rule applies to breaches of contract where the defendant acted fraudulently or in bad faith."
In the instant case, Art. 1764 does not apply. However, Art. 2220 is applicable, given PAL's display of bad faith.
Bad faith is a breach of a known duty through some motive of interest or ill will. Here, the employees of PAL were utterly insensitive to Chiok's need to be in Manila on November 25, 1981, and to the likelihood that his business affairs in the city would be jeopardized because of a mistake on their part. It was that mistake that had caused the omission of his name from the passenger list despite his confirmed flight ticket. By merely looking at his ticket and validation sticker, it is evident that the glitch was the airline's fault. However, no serious attempt was made by PAL to secure the all-important transportation of respondent to Manila on the following day. To make matters worse, PAL allowed a group of non-revenue passengers, who had no confirmed tickets or reservations, to board Flight PR 307.