KLM vs CA

FACTS: Sometime in March 1965, Spouses Mendoza approached Mr. Reyes, the branch
manager of Philippine Travel Bureau, for consultation about a world tour which they were
intending to make with their daughter and niece. Three segments of the trip, the longest,
was via KLM. Respondents decided that one of the routes they will take was a Barcelona-
Lourdes route with knowledge that only one airline, Aer Lingus, served it. Reyes made the
necessary reservations. To this, KLM secured seat reservations for the Mendozas and their
companions from the carriers which would ferry them throughout their trip, which the
exception of Aer Lingus. When the Mendozas left the Philippines, they were issued KLM
tickets for the entire trip. However, their coupon for Aer Lingus was marked on request.

When they were in Germany, they went to the KLM office and obtained a confirmation from
Aer Lingus. At the airport in Barcelona, the Mendozas and their companions checked in for
their flight to Lourdes. However, although their daughter and niece were allowed to take the
flight, the spouses Mendozas were off loaded on orders of the Aer Lingus manager, who
brusquely shoved them aside and shouted at them. So the spouses Mendozas took a train
ride to Lourdes instead.

Thus, they filed a complaint for damages against KLM for breach of contract of carriage.

RTC: After due hearing, the trial court awarded damages to the respondents as follows:
$43.35 or its peso equivalent as actual damages, P10,000 as moral damages, P5,000 as
exemplary damages, and P5,000 as attorney's fees, and expenses of litigation.

CA: In its decision of August 14, 1969 the Court of Appeals decreed as follows: "Appellant
KLM is condemned to pay unto the plaintiffs the sum of $43.35 as actual damages; P50,000
as moral damages; and P6,000 as attorney's fees and costs."

Hence, KLM brings this petition to the Supreme Court. KLM cites Art 30 of the Warsaw
Convention, which states: the passenger or his representatives can take action only against
the carrier who performed the transportation during which the accident or delay occurred.
Also, KLM avers that the front cover of each ticket reads: that liability of the carrier for
damages shall be limited to occurrences on its own line.

Issue: Whether or not KLM is liable for breach of contract of carriage?

Held: The applicability of Art. 30 of the Warsaw Convention cannot be sustained. The article
presupposes the occurrence of delay or accident. What is manifest here is that the Aer
Lingus refused to transport the spouses Mendozas to their planned and contracted
destination.

As the airline which issued the tickets, KLM was chargeable with the duty and responsibility
of specifically informing the spouses of the conditions prescribed in their tickets or to
ascertain that the spouses read them before they accepted their passage tickets.

The Supreme Court held that KLM cannot be merely assumed as a ticket-issuing agent for
other airlines and limit its liability to untoward occurrences on its own line.

The court found, that the passage tickets provide that the carriage to be performed therein
by several successive carriers is to be regarded as a single operation, which is
diametrically incompatible with the theory of the KLM that the respondents entered into a
series of independent contracts with the carriers which took them on the various segments
of their trip.

The respondents, under that assurance of the internationally prestigious KLM, naturally had
the right to expect that their tickets would be honored by Aer Lingus to which, in the legal
sense, the KLM had indorsed and in effect guaranteed the performance of its principal
engagement to carry out the respondents' scheduled itinerary previously and mutually
agreed upon between the parties.

The breach of that guarantee was aggravated by the discourteous and highly arbitrary
conduct of an official of the Aer Lingus which the KLM had engaged to transport the
respondents on the Barcelona-Lourdes segment of their itinerary. It is but just and in full
accord with the policy expressly embodied in our civil law which enjoins courts to be more
vigilant for the protection of a contracting party who occupies an inferior position with
respect to the other contracting party, that the KLM should be held responsible for the
abuse, injury and embarrassment suffered by the respondents at the hands of a supercilious
boor of the Aer Lingus.