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G.R. No.

170141

April 22, 2008

JAPAN AIRLINES, petitioner, vs. JESUS SIMANGAN, respondent. DECISION REYES R.T., J. 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. !he power to admit or not an alien into the country is a sovereign act which cannot be interfered with even by "apan #irlines $"#%&.' In this petition for review on certiorari,( petitioner "#% appeals the) $ & *ecision+ dated ,ay ( , '--. of the /ourt of #ppeals $/#& ordering it to pay respondent "esus 0imangan moral and exemplary damages1 and $'& 2esolution. of the same court dated 0eptember '3, '--. denying "#%4s motion for reconsideration. T!" #$%&' In 55 , respondent "esus 0imangan decided to donate a kidney to his ailing cousin, %oreto 0imangan, in 6/%# 0chool of ,edicine in %os #ngeles, /alifornia, 6.0.#. 6pon re7uest of 6/%#, respondent undertook a series of laboratory tests at the National 8idney Institute in 9ue:on /ity to verify whether his blood and tissue type are compatible with %oreto4s.; <ortunately, said tests proved that respondent4s blood and tissue type were well=matched with %oreto4s.> 2espondent needed to go to the 6nited 0tates to complete his preliminary work=up and donation surgery. Hence, to facilitate respondent4s travel to the 6nited 0tates, 6/%# wrote a letter to the #merican /onsulate in ,anila to arrange for his visa. In due time, respondent was issued an emergency 6.0. visa by the #merican Embassy in ,anila.3 Having obtained an emergency 6.0. visa, respondent purchased a round trip plane ticket from petitioner "#% for 60? ,+3..-- and was issued the corresponding boarding pass.5 He was scheduled to a particular flight bound for %os #ngeles, /alifornia, 6.0.#. via Narita, "apan. @n "uly '5, 55', the date of his flight, respondent went to Ninoy #7uino International #irport in the company of several relatives and friends. He was allowed to check=in at "#%4s counter. ' His plane ticket, boarding pass, travel authority and personal articles were subAected to rigid immigration and security routines. ( #fter passing through said immigration and security procedures, respondent was allowed by "#% to enter its airplane. +

While inside the airplane, "#%4s airline crew suspected respondent of carrying a falsified travel document and imputed that he would only use the trip to the 6nited 0tates as a pretext to stay and work in "apan. . !he stewardess asked respondent to show his travel documents. 0hortly after, the stewardess along with a "apanese and a <ilipino haughtily ordered him to stand up and leave the plane. ; 2espondent protested, explaining that he was issued a 6.0. visa. "ust to allow him to board the plane, he pleaded with "#% to closely monitor his movements when the aircraft stops over in Narita. > His pleas were ignored. He was then constrained to go out of the plane. 3 In a nutshell, respondent was bumped off the flight. 2espondent went to "#%4s ground office and waited there for three hours. ,eanwhile, the plane took off and he was left behind. 5 #fterwards, he was informed that his travel documents were, indeed, in order.'- 2espondent was refunded the cost of his plane ticket less the sum of 60?.--.-- which was deducted by "#%.' 0ubse7uently, respondent4s 6.0. visa was cancelled.'' *ispleased by the turn of events, respondent filed an action for damages against "#% with the 2egional !rial /ourt $2!/& in Balen:uela /ity, docketed as /ivil /ase No. + 5.=B=5(. He claimed he was not able to donate his kidney to %oreto1 and that he suffered terrible embarrassment and mental anguish.'( He prayed that he be awarded C( million as moral damages, C .. million as exemplary damages and C.--,---.-- as attorney4s fees.'+ "#% denied the material allegations of the complaint. It argued, among others, that its failure to allow respondent to fly on his scheduled departure was due to Da need for his travel documents to be authenticated by the 6nited 0tates EmbassyD'. because no one from "#%4s airport staff had encountered a parole visa before.'; It posited that the authentication re7uired additional time1 that respondent was advised to take the flight the following day, "uly (-, 55'. "#% alleged that respondent agreed to be rebooked on "uly (-, 55'.'> "#% also lodged a counterclaim anchored on respondent4s alleged wrongful institution of the complaint. It prayed for litigation expenses, exemplary damages and attorney4s fees.'3 @n 0eptember ' , '---, the 2!/ presided by "udge <loro C. #leAo rendered its decision in favor of respondent $plaintiff&, disposing as follows) WHE2E<@2E, Audgment is hereby rendered ordering the defendant to pay the plaintiff the amount of C ,---,---.-- as moral damages, the amount of C.--,---.-- as exemplary damages and the amount of C'.-,---.-- as attorney4s fees, plus the cost of suit.'5 !he 2!/ explained) In summarily and insolently ordering the plaintiff to disembark while the latter was already settled in his assigned seat, the defendant violated the contract of carriage1 that when the plaintiff was ordered out of the plane under the pretext that the genuineness of his travel documents would be verified it had caused him embarrassment and besmirched reputation1 and that when the plaintiff was finally not allowed to take the flight, he suffered more wounded feelings and social humiliation for which the plaintiff was asking to be awarded moral and exemplary damages as well as attorney4s fees.

!he reason given by the defendant that what prompted them to investigate the genuineness of the travel documents of the plaintiff was that the plaintiff was not then carrying a regular visa but Aust a letter does not appear satisfactory. !he defendant is engaged in transporting passengers by plane from country to country and is therefore conversant with the travel documents. !he defendant should not be allowed to pretend, to the preAudice of the plaintiff not to know that the travel documents of the plaintiff are valid documents to allow him entry in the 6nited 0tates. !he foregoing act of the defendant in ordering the plaintiff to deplane while already settled in his assigned seat clearly demonstrated that the defendant breached its contract of carriage with the plaintiff as passenger in bad faith and as such the plaintiff is entitled to moral and exemplary damages as well as to an award of attorney4s fees.(*isagreeing with the 2!/ Audgment, "#% appealed to the /# contending that it is not guilty of breach of contract of carriage, hence, not liable for damages.( It posited that it is the one entitled to recover on its counterclaim.(' CA R(li)* In a *ecision(( dated ,ay ( , '--., the /# affirmed the decision of the 2!/ with modification in that it lowered the amount of moral and exemplary damages and deleted the award of attorney4s fees. !he fallo of the /# decision reads) WHE2E<@2E, the appealed *ecision is #<<I2,E* with ,@*I<I/#!I@N. #ppellant "#C#N #I2 %INE0 is ordered to pay appellee "E060 0I,#NE#N the reduced sums, as follows) <ive Hundred !housand Cesos $C.--,---.--& as moral damages, and !wo Hundred <ifty !housand Cesos $C'.-,---.--& as exemplary damages. !he award of attorney4s fees is hereby *E%E!E*.(+ !he /# elucidated that since "#% issued to respondent a round trip plane ticket for a lawful consideration, Dthere arose a perfected contract between them.D(. It found that respondent was Dhaughtily eAectedD(; by "#% and that Dhe was certainly embarrassed and humiliatedD(> when, in the presence of other passengers, "#%4s airline staff Dshouted at him to stand up and arrogantly asked him to produce his travel papers, without the least courtesy every human being is entitled toD1(3 and that Dhe was compelled to deplane on the grounds that his papers were fake.D(5 !he /# ratiocinated) While the protection of passengers must take precedence over convenience, the implementation of security measures must be attended by basic courtesies. In fact, breach of the contract of carriage creates against the carrier a presumption of liability, by a simple proof of inAury, relieving the inAured passenger of the duty to establish the fault of the carrier or of his employees1 and placing on the carrier the burden to prove that it was due to an unforeseen event or to force majeure.

!hat appellee possessed bogus travel documents and that he might stay illegally in "apan are allegations without substantiation. #lso, appellant4s attempt to rebook appellee the following day was too late and did not relieve it from liability. !he damage had been done. Fesides, its belated theory of novation, i.e., that appellant4s original obligation to carry appellee to Narita and %os #ngeles on "uly '5, 55' was extinguished by novation when appellant and appellant agreed that appellee will instead take appellant4s flight to Narita on the following day, "uly (-, 55', deserves little attention. It is inappropriate at bar. 9uestions not taken up during the trial cannot be raised for the first time on appeal.+$6nderscoring ours and citations were omitted& /iting Ortigas, Jr. v. Lufthansa German Airlines,+ the /# declared that D$i&n contracts of common carriage, inattention and lack of care on the part of the carrier resulting in the failure of the passenger to be accommodated in the class contracted for amounts to bad faith or fraud which entitles the passengers to the award of moral damages in accordance with #rticle '''- of the /ivil /ode.D+' Nevertheless, the /# modified the damages awarded by the 2!/. It explained) <undamental in the law on damages is that one inAured by a breach of a contract, or by a wrongful or negligent act or omission shall have a fair and Aust compensation commensurate to the loss sustained as conse7uence of the defendant4s act. Feing discretionary on the court, the amount, however, should not be palpably and scandalously excessive. Here, the trial court4s award of C ,---,---.-- as moral damages appears to be overblown. No other proof of appellee4s social standing, profession, financial capabilities was presented except that he was single and a businessman. !o 6s, the sum of .--,---.-- is Aust and fair. <or, moral damages are emphatically not intended to enrich a complainant at the expense of the defendant. !hey are awarded only to enable the inAured party to obtain means, diversion or amusements that will serve to alleviate the moral suffering he has undergone, by reason of the defendant4s culpable action. ,oreover, the grant of C.--,---.-- as exemplary damages needs to be reduced to a reasonable level. !he award of exemplary damages is designed to permit the courts to mould behavior that has socially deleterious conse7uences and its imposition is re7uired by public policy to suppress the wanton acts of the offender. Hence, the sum of C'.-,---.-- is ade7uate under the circumstances. !he award of C'.-,---.-- as attorney4s fees lacks factual basis. #ppellee was definitely compelled to litigate in protecting his rights and in seeking relief from appellant4s misdeeds. Get, the record is devoid of evidence to show the cost of the services of his counsel andHor the actual expenses incurred in prosecuting his action.+( $/itations were omitted& When "#%4s motion for reconsideration was denied, it resorted to the petition at bar.

I''("' "#% poses the following issues = I. WHE!HE2 @2 N@! !HE /@62! @< #CCE#%0 E22E* IN 26%INE !H#! 2E0C@N*EN! W#0 EN!I!%E* !@ ,@2#% *#,#EE0, /@N0I*E2INE !H#!) #. "#% W#0 N@! E6I%!G @< F2E#/H @< /@N!2#/!. F. ,@2#% *#,#EE0 ,#G FE #W#2*E* IN F2E#/H @< /@N!2#/! /#0E0 @N%G WHEN !HE F2E#/H I0 #!!EN*E* FG <2#6* @2 F#* <#I!H. #006,INE ARGUENDO !H#! "#% W#0 E6I%!G @< F2E#/H, "#% *I* N@! #/! <2#6*6%EN!%G @2 IN F#* <#I!H #0 !@ EN!I!%E 2E0C@N*EN! !@ ,@2#% *#,#EE0. /. !HE %#W *I0!INE6I0HE0 # /@N!2#/!6#% F2E#/H E<<E/!E* IN E@@* <#I!H <2@, @NE #!!EN*E* FG F#* <#I!H. II. WHE!HE2 @2 N@! !HE /@62! @< #CCE#%0 E22E* IN 26%INE !H#! 2E0C@N*EN! W#0 EN!I!%E* !@ EIE,C%#2G *#,#EE0 /@N0I*E2INE !H#!) #. EIE,C%#2G *#,#EE0 #2E N@! 2E/@BE2#F%E IN F2E#/H @< /@N!2#/! @< /#22I#EE 6N%E00 !HE /#22IE2 I0 E6I%!G @< W#N!@N, <2#6*6%EN!, 2E/8%E00, @CC2E00IBE @2 ,#%EB@%EN! /@N*6/!. F. #006,INE ARGUENDO !H#! "#% W#0 E6I%!G @< F2E#/H, "#% *I* N@! #/! IN # W#N!@N <2#6*6%EN!, 2E/8%E00, @CC2E00IBE @2 ,#%EB@%EN! ,#NNE2 #0 !@ EN!I!%E 2E0C@N*EN! !@ EIE,C%#2G *#,#EE0. III. #006,INE ARGUENDO !H#! 2E0C@N*EN! W#0 EN!I!%E* !@ #N #W#2* @< *#,#EE0, WHE!HE2 @2 N@! !HE /@62! @< #CCE#%0 #W#2* @< C>.-,--- IN *#,#EE0 W#0 EI/E00IBE #N* 6NC2E/E*EN!E*. IB. WHE!HE2 @2 N@! !HE /@62! @< #CCE#%0 E22E* IN N@! <IN*INE <@2 "#% @N I!0 /@6N!E2/%#I,.++ $6nderscoring @urs&

Fasically, there are three $(& issues to resolve here) $ & whether or not "#% is guilty of contract of carriage1 $'& whether or not respondent is entitled to moral and exemplary damages1 and $(& whether or not "#% is entitled to its counterclaim for damages. O(r R(li)* This Court is not a trier of facts. /hiefly, the issues are factual. !he 2!/ findings of facts were affirmed by the /#. !he /# also gave its nod to the reasoning of the 2!/ except as to the awards of damages, which were reduced, and that of attorney4s fees, which was deleted. We are not a trier of facts. We generally rely upon, and are bound by, the conclusions on this matter of the lower courts, which are better e7uipped and have better opportunity to assess the evidence first=hand, including the testimony of the witnesses.+. We have repeatedly held that the findings of fact of the /# are final and conclusive and cannot be reviewed on appeal to the 0upreme /ourt provided they are based on substantial evidence.+; We have no Aurisdiction, as a rule, to reverse their findings.+> #mong the exceptions to this rule are) $a& when the conclusion is a finding grounded entirely on speculations, surmises or conAectures1 $b& when the inference made is manifestly mistaken, absurd or impossible1 $c& where there is grave abuse of discretion1 $d& when the Audgment is based on a misapprehension of facts1 $e& when the findings of facts are conflicting1 $f& when the /#, in making its findings, went beyond the issues of the case and the same is contrary to the admissions of both appellant and appellee.+3 !he said exceptions, which are being invoked by "#%, are not found here. !here is no indication that the findings of the /# are contrary to the evidence on record or that vital testimonies of "#%4s witnesses were disregarded. Neither did the /# commit misapprehension of facts nor did it fail to consider relevant facts. %ikewise, there was no grave abuse of discretion in the appreciation of facts or mistaken and absurd inferences. We thus sustain the coherent facts as established by the courts below, there being no sufficient showing that the said courts committed reversible error in reaching their conclusions. JAL is guilty of breach of contract of carriage. !hat respondent purchased a round trip plane ticket from "#% and was issued the corresponding boarding pass is uncontroverted.+5 His plane ticket, boarding pass, travel authority and personal articles were subAected to rigid immigration and security procedure..- #fter passing through said immigration and security procedure, he was allowed by "#% to enter its airplane to fly to %os #ngeles, /alifornia, 6.0.#. via Narita, "apan.. /oncisely, there was a contract of carriage between "#% and respondent.

Nevertheless, "#% made respondent get off the plane on his scheduled departure on "uly '5, 55'. He was not allowed by "#% to fly. "#% thus failed to comply with its obligation under the contract of carriage. "#% Austifies its action by arguing that there was Da need to verify the authenticity of respondent4s travel document.D.' It alleged that no one from its airport staff had encountered a parole visa before..( It further contended that respondent agreed to fly the next day so that it could first verify his travel document, hence, there was novation..+ It maintained that it was not guilty of breach of contract of carriage as respondent was not able to travel to the 6nited 0tates due to his own voluntary desistance... We cannot agree. "#% did not allow respondent to fly. It informed respondent that there was a need to first check the authenticity of his travel documents with the 6.0. Embassy. .; #s admitted by "#%, Dthe flight could not wait for ,r. 0imangan because it was ready to depart.D.> 0ince "#% definitely declared that the flight could not wait for respondent, it gave respondent no choice but to be left behind. !he latter was unceremoniously bumped off despite his protestations and valid travel documents and notwithstanding his contract of carriage with "#%. *amage had already been done when respondent was offered to fly the next day on "uly (-, 55'. 0aid offer did not cure "#%4s default. /onsidering that respondent was forced to get out of the plane and left behind against his will, he could not have freely consented to be rebooked the next day. In short, he did not agree to the alleged novation. 0ince novation implies a waiver of the right the creditor had before the novation, such waiver must be express..3 It cannot be supposed, without clear proof, that respondent had willingly done away with his right to fly on "uly '5, 55'. ,oreover, the reason behind the bumping off incident, as found by the 2!/ and /#, was that "#% personnel imputed that respondent would only use the trip to the 6nited 0tates as a pretext to stay and work in "apan..5 #part from the fact that respondent4s plane ticket, boarding pass, travel authority and personal articles already passed the rigid immigration and security routines,;- "#%, as a common carrier, ought to know the kind of valid travel documents respondent carried. #s provided in #rticle >.. of the New /ivil /ode) D# common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances.D; !hus, We find untenable "#%4s defense of Dverification of respondent4s documentsD in its breach of contract of carriage. It bears repeating that the power to admit or not an alien into the country is a sovereign act which cannot be interfered with even by "#%.;' In an action for breach of contract of carriage, all that is re7uired of plaintiff is to prove the existence of such contract and its non=performance by the carrier through the latter4s failure to carry the passenger safely to his destination.;( 2espondent has complied with these twin re7uisites.

Respondent is entitled to moral and exemplary damages and attorney's fees plus legal interest. With reference to moral damages, "#% alleged that they are not recoverable in actions ex contractu except only when the breach is attended by fraud or bad faith. It is contended that it did not act fraudulently or in bad faith towards respondent, hence, it may not be held liable for moral damages. #s a general rule, moral damages are not recoverable in actions for damages predicated on a breach of contract for it is not one of the items enumerated under #rticle '' 5 of the /ivil /ode.;+ #s an exception, such damages are recoverable) $ & in cases in which the mishap results in the death of a passenger, as provided in #rticle >;+, in relation to #rticle ''-;$(& of the /ivil /ode1 and $'& in the cases in which the carrier is guilty of fraud or bad faith, as provided in #rticle '''-.;. !he acts committed by "#% against respondent amounts to bad faith. #s found by the 2!/, "#% breached its contract of carriage with respondent in bad faith. "#% personnel summarily and insolently ordered respondent to disembark while the latter was already settled in his assigned seat. He was ordered out of the plane under the alleged reason that the genuineness of his travel documents should be verified. !hese findings of facts were upheld by the /#, to wit) x x x he was haughtily eAected by appellant. He was certainly embarrassed and humiliated when, in the presence of other passengers, the appellant4s airline staff shouted at him to stand up and arrogantly asked him to produce his travel papers, without the least courtesy every human being is entitled to. !hen, he was compelled to deplane on the grounds that his papers were fake. His protestation of having been issued a 6.0. visa coupled with his plea to appellant to closely monitor his movements when the aircraft stops over in Narita, were ignored. Worse, he was made to wait for many hours at the office of appellant only to be told later that he has valid travel documents.;; $6nderscoring ours& /learly, "#% is liable for moral damages. It is firmly settled that moral damages are recoverable in suits predicated on breach of a contract of carriage where it is proved that the carrier was guilty of fraud or bad faith, as in this case. Inattention to and lack of care for the interests of its passengers who are entitled to its utmost consideration, particularly as to their convenience, amount to bad faith which entitles the passenger to an award of moral damages. What the law considers as bad faith which may furnish the ground for an award of moral damages would be bad faith in securing the contract and in the execution thereof, as well as in the enforcement of its terms, or any other kind of deceit.;> "#% is also liable for exemplary damages as its above=mentioned acts constitute wanton, oppressive and malevolent acts against respondent. Exemplary damages, which are awarded by way of example or correction for the public good, may be recovered in contractual obligations, as in this case, if defendant acted in wanton, fraudulent, reckless, oppressive, or malevolent manner.;3

Exemplary damages are designed by our civil law to permit the courts to reshape behaviour that is socially deleterious in its conse7uence by creating negative incentives or deterrents against such behaviour. In re7uiring compliance with the standard of extraordinary diligence, a standard which is, in fact, that of the highest possible degree of diligence, from common carriers and in creating a presumption of negligence against them, the law seeks to compel them to control their employees, to tame their reckless instincts and to force them to take ade7uate care of human beings and their property.;5 Neglect or malfeasance of the carrier4s employees could give ground for an action for damages. Cassengers have a right to be treated by the carrier4s employees with kindness, respect, courtesy and due consideration and are entitled to be protected against personal misconduct, inAurious language, indignities and abuses from such employees.>!he assessment of C.--,---.-- as moral damages and C --,---.-- as exemplary damages in respondent4s favor is, in @ur view, reasonable and realistic. !his award is reasonably sufficient to indemnify him for the humiliation and embarrassment he suffered. !his also serves as an example to discourage the repetition of similar oppressive acts. With respect to attorney4s fees, they may be awarded when defendant4s act or omission has compelled plaintiff to litigate with third persons or to incur expenses to protect his interest.> !he /ourt, in Construction Develo ment Cor oration of the !hili ines v. Estrella,>' citing "ra#ers Ro$al %an& Em lo$ees Union'(n#e en#ent v. National La)or Relations Commission,>( elucidated thus) !here are two commonly accepted concepts of attorney4s fees, the so=called ordinary and extraordinary. In its ordinary concept, an attorney4s fee is the reasonable compensation paid to a lawyer by his client for the legal services he has rendered to the latter. !he basis of this compensation is the fact of his employment by and his agreement with the client. I) i&' "+&r$or,i)$r- %o)%"p&, $) $&&or)"-.' /"" i' $) i),"0)i&- /or ,$0$*"' or,"r", 1- &!" %o(r& &o 1" p$i, 1- &!" lo'i)* p$r&- i) $ li&i*$&io). !he basis of this is any of the cases provided by law where such award can be made, such as those authori:ed in #rticle ''-3, /ivil /ode, and i' p$-$1l" )o& &o &!" l$2-"r 1(& &o &!" %li")&, ()l"'' &!"!$3" $*r"", &!$& &!" $2$r, '!$ll p"r&$i) &o &!" l$2-"r $' $,,i&io)$l %o0p")'$&io) or $' p$r& &!"r"o/.>+ It was therefore erroneous for the /# to delete the award of attorney4s fees on the ground that the record is devoid of evidence to show the cost of the services of respondent4s counsel. !he amount is actually discretionary upon the /ourt so long as it passes the test of reasonableness. !hey may be recovered as actual or compensatory damages when exemplary damages are awarded and whenever the court deems it Aust and e7uitable,>. as in this case. /onsidering the factual backdrop of this case, attorney4s fees in the amount of C'--,---.-- is reasonably modest.

!he above liabilities of "#% in the total amount of C3--,---.-- earn legal interest pursuant to the /ourt4s ruling in Construction Develo ment Cor oration of the !hili ines v. Estrella,>; citing Eastern *hi ing Lines, (nc. v. Court of A eals,>> to wit) 2egarding the imposition of legal interest at the rate of ;J from the time of the filing of the complaint, we held in Eastern *hi ing Lines, (nc. v. Court of A eals, that when an obligation, regardless of its source, i.e., law, contracts, 7uasi=contracts, delicts or 7uasi= delicts is breached, the contravenor can be held liable for payment of interest in the concept of actual and compensatory damages, subAect to the following rules, to wit = . When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that which may have been stipulated in writing. <urthermore, the interest due shall itself earn legal interest from the time it is Audicially demanded. In the absence of stipulation, the rate of interest shall be 'J per annum to be computed from default, i.e., from Audicial or extraAudicial demand under and subAect to the provisions of #rticle ;5 of the /ivil /ode. '. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of ;J er annum. No interest, however, shall be adAudged on unli7uidated claims or damages except when or until the demand can be established with reasonable certainty. #ccordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made Audicially or extraAudicially $#rt. ;5, /ivil /ode& but when such certainty cannot be so reasonably established at the time the demand is made, &!" i)&"r"'& '!$ll 1"*i) &o r() o)l- /ro0 &!" ,$&" &!" 4(,*0")& o/ &!" %o(r& i' 0$," 5$& 2!i%! &i0" &!" 6($)&i/i%$&io) o/ ,$0$*"' 0$- 1" ,""0", &o !$3" 1"") r"$'o)$1l- $'%"r&$i)",7. !he actual base for the computation of legal interest shall, in any case, be on the amount finally adAudged. (. 8!") &!" 4(,*0")& o/ &!" %o(r& $2$r,i)* $ '(0 o/ 0o)"- 1"%o0"' /i)$l $), "+"%(&or-, &!" r$&" o/ l"*$l i)&"r"'&, 2!"&!"r &!" %$'" /$ll' (),"r p$r$*r$p! 1 or p$r$*r$p! 2, $1o3", '!$ll 1" 129 p"r $))(0 /ro0 '(%! /i)$li&- ()&il i&' '$&i'/$%&io), &!i' i)&"ri0 p"rio, 1"i)* ,""0", &o 1" 1- &!") $) "6(i3$l")& &o $ /or1"$r$)%" o/ %r",i&.>3 $Emphasis supplied and citations omitted& #ccordingly, in addition to the said total amount of C3--,---.--, "#% is liable to pay respondent legal interest. Cursuant to the above ruling of the /ourt, the legal interest is ;J and it shall be reckoned from 0eptember ' , '--- when the 2!/ rendered its Audgment. <rom the time this *ecision becomes final and executory, the interest rate shall be 'J until its satisfaction. JAL is not entitled to its counterclaim for damages.

!he counterclaim of "#% in its #nswer>5 is a compulsory counterclaim for damages and attorney4s fees arising from the filing of the complaint. !here is no mention of any other counter claims. !his compulsory counterclaim of "#% arising from the filing of the complaint may not be granted inasmuch as the complaint against it is obviously not malicious or unfounded. It was filed by respondent precisely to claim his right to damages against "#%. Well=settled is the rule that the commencement of an action does not er se make the action wrongful and subAect the action to damages, for the law could not have meant to impose a penalty on the right to litigate.3We reiterate case law that if damages result from a party4s exercise of a right, it is #amnum a)s+ue injuria.3 %awful acts give rise to no inAury. 8$l$)* p"r!(2i'-o)* 0$$ri)* i,(lo& $)* p$**$0i& '$ '$rili)* :$r$p$&$). *uring the trial, however, "#% presented a witness who testified that "#% suffered further damages. #llegedly, respondent caused the publications of his subAect complaint against "#% in the newspaper for which "#% suffered damages.3' #lthough these additional damages allegedly suffered by "#% were not incorporated in its #nswer as they arose subse7uent to its filing, "#%4s witness was able to testify on the same before the 2!/.3( Hence, although these issues were not raised by the pleadings, they shall be treated in all respects as if they had been raised in the pleadings. #s provided in 0ection ., 2ule - of the 2ules of /ourt, D$w&hen issues not raised by the pleadings are tried with the express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings.D Nevertheless, "#%4s counterclaim cannot be granted. "#% is a common carrier. "#%4s business is mainly with the traveling public. It invites people to avail themselves of the comforts and advantages it offers.3+ 0ince "#% deals with the public, its bumping off of respondent without a valid reason naturally drew public attention and generated a public issue. !he publications involved matters about which the public has the right to be informed because they relate to a public issue. !his public issue or concern is a legitimate topic of a public comment that may be validly published. #ssuming that respondent, indeed, caused the publication of his complaint, he may not be held liable for damages for it. !he constitutional guarantee of freedom of the speech and of the press includes fair commentaries on matters of public interest. !his is explained by the /ourt in %orjal v. Court of A eals,3. to wit) !o reiterate, fair commentaries on matters of public interest are privileged and constitute a valid defense in an action for libel or slander. !he doctrine of fair comment means that while in general every discreditable imputation publicly made is deemed false, because

every man is presumed innocent until his guilt is Audicially proved, and every false imputation is deemed malicious, nevertheless, when the discreditable imputation is directed against a public person in his public capacity, it is not necessarily actionable. In order that such discreditable imputation to a public official may be actionable, it must either be a false allegation of fact or a comment based on a false supposition. If the comment is an expression of opinion, based on established facts, then it is immaterial that the opinion happens to be mistaken, as long as it might reasonably be inferred from the facts.3; $/itations omitted and underscoring ours& Even though "#% is not a public official, the rule on privileged commentaries on matters of public interest applies to it. !he privilege applies not only to public officials but extends to a great variety of subAects, and includes matters of public concern, public men, and candidates for office.3> Hence, pursuant to the %orjal case, there must be an actual malice in order that a discreditable imputation to a public person in his public capacity or to a public official may be actionable. !o be considered malicious, the libelous statements must be shown to have been written or published with the knowledge that they are false or in reckless disregard of whether they are false or not.33 /onsidering that the published articles involve matters of public interest and that its expressed opinion is not malicious but based on established facts, the imputations against "#% are not actionable. !herefore, "#% may not claim damages for them. 8;ERE#ORE, the petition is DENIED. !he appealed *ecision of the /ourt of #ppeals is A##IRMED 8IT; MODI#ICATION. #s modified, petitioner "apan #irlines is ordered to pay respondent "esus 0imangan the following) $ & C.--,---.-- as moral damages1 $'& C --,---.-- as exemplary damages1 and $(& C'--,---.-- as attorney4s fees. !he total amount adAudged shall earn legal interest at the rate of ;J per annum from the date of Audgment of the 2egional !rial /ourt on 0eptember ' , '--- until the finality of this *ecision. <rom the time this *ecision becomes final and executory, the unpaid amount, if any, shall earn legal interest at the rate of 'J per annum until its satisfaction. SO ORDERED.