DAMAGES AND OTHER KINDS OF DAMAGES HELD:
YeS. In contracts, the obligor in good faith (common carrier) is liable only for the natural and
Chapter One: General Provisions
Chapter Two: Actual or Compensatory Damages
Cariaga vs. LTB Co., 101 Phil 346
FACTS:
Moncada was driving a bus of the Laguna Tayabas Bus Company (LTB) and Cariaga was one
of the passengers. The bus is bound for Lilio, Laguna (coming from Manila). As the bus reached the
poblacion of Bay, Laguna, where the national highway crossed a railroad track, it (bus) bumped
against the engine of a train then passing by. The impact was so strong that it caused the first six
wheels of the train to be derailed, while the engine and front part of the body of the bus were
wrecked. Moncada (bus driver) died while Cariaga suffered major injuries. Cariaga was unconscious
during the first 35 days after the accident. A portion of his brain was removed. According to the
doctors, due to this operation, Cariaga’s mentality has been so reduced (by 50%) that can no longer
finish his studies as a medical student. Also, Cariaga ended up in a helpless ocndition, virtually an
invalid, both physically and mentally.
LTB paid Cariaga’s hospital, medical and miscellaneous expenses. Also, LTB gave him Php
10.00 daily allowance from January until April 1953. Complaint was filed agains LTB and MRR Co. for
recovery of damages. LTB’s argument, The accident was due to the negligence of MRR for not
providing a crossing bar at the point where the national highway crossed the railway track. That the
driver of the train violated the law. In sounding the whistle only when the collision was
about to take place instead of at a distance of at least 300 meters from the crossing. And in not
ringing the locomotive bell at all. MRR’s argument: It was the reckless negligence of the bus driver
that caused the accident.
RTC held that it was the negligence of the bus driver that caused the accident. It ordered LTB
to pay Cariaga compensatory damages. Hence, this appeal where the Carriagas claim that the RTC
should have also awarded them moral and actual damages.
ISSUE:
WON the bus driver was negligent - Yes
HELD:
Yes. Evidence shows that the train whistle had been sounded several times before it reached
the crossing and the bus driver simply ignored the warnings. Instead of slowing down, Moncada (bus
driver) tried to make the bus pass the crossing before the train by not stopping a few meters from the
railway track and in proceeding ahead. In fact, there was a bus which arrived at the crossing ahead of
the one driven by Moncada. Said bus stopped before the crossing, hence nothing happened to it.
ISSUE:
WON the amound awarded by the RTC as compensatory damages shall be increased
probable consequences of the breach and which the parties have foreseen or could have reasonably
foreseen at the time the obligation was constituted. If in bad faith, fraud, malice or wanton attitude,
the obligor in breach is liable for all damages reasonably attributed to the breach. In both instances,
provided that the damages have been proven.
In the case at bar, LTB is liable not only for the actual damages suffered for medical and
hospital expenses but also for the income which the passenger would have earned had he finished
medical school. These are likewise considered as actual damages because they could have been
reasonably foreseen by the parties at the time the passenger boarded the bus. No moral damages
could be awarded (passenger did not die), because it was not shown that the breach of contract, for
which the action is based, was not tainted with fraud or bad faith. The claim made by spouses
Cariaga for actual and compensatory damages cannot be awarded due to the fact that the present
action is based upon a breach of contract of carriage to which said spouses were not a party, and
neither can they premise their claim upon the negligence or quasi-delict of LTB because they were
not the ones injured in the accident.
Villa Rey Transit Inc.. vs. CA 31 SCRA 511
Facts:
On March 17, 1960, Policronio Quintos, Jr. was riding the petitioner’s bus, when the said bus
frontally hit the rear side of a bullcart filled with hay. The protruding end of the bamboo pole at the
rear of the cart penetrated the windshield of the bus and landed at Policronio’s face. He died of
traumatic shock due to cerebral injuries. Private respondents are sisters and surviving heirs of the
deceased. They brought this action against Villa Rey Transit for breach of contract of carriage. The
trial court found that the death was caused by the negligence of the bus driver, for whom petitioner
was liable under the contract of carriage with the deceased.
Issues:
(1) The number of years to be used as basis of computation
(2) The rate at which the losses sustained by respondents should be fixed
Held:
(1) The determination of the indemnity to be awarded to the heirs of a deceased person has
no fixed basis. Much is left to the discretion of the court considering the moral and material damages
involved, and so it has been said that "(t)here can be no exact or uniform rule for measuring the value
of a human life and the measure of damages cannot be arrived at by precise mathematical
calculation, but the amount recoverable depends on the particular facts and circumstances of each
case. The life expectancy of the deceased or of the beneficiary, whichever is shorter, is an important
factor.' Other factors that are usually considered are: (1) pecuniary loss to plaintiff or beneficiary; (2)
loss of support; (3) loss of service; (4) loss of society; (5) mental suffering of beneficiaries; and (6)
medical and funeral expenses."
Thus, life expectancy is, not only relevant, but, also, an important element in fixing the
amount recoverable by private respondents herein. Although it is not the sole element determinative
of said amount, no cogent reason has been given to warrant its disregard and the adoption, in the
case at bar, of a purely arbitrary standard, such as a four-year rule. In short, the Court of Appeals has
not erred in basing the computation of petitioner's liability upon the life expectancy of Policronio
Quintos, Jr.
(2) With respect to the rate at which the damages shall be computed, petitioner impugns the
decision appealed from upon the ground that the damages awarded therein will have to be paid now,
whereas most of those sought to be indemnified will be suffered years later. This argument is
basically true, and this is, perhaps, one of the reasons why the Alcantara case points out the absence
of a "fixed basis" for the ascertainment of the damages recoverable in litigations like the one at bar.
Just the same, the force of the said argument of petitioner herein is offset by the fact that, although
payment of the award in the case at bar will have to take place upon the finality of the decision
therein, the liability of petitioner herein had been fixed at the rate only of P2,184.00 a year, which is
the annual salary of Policronio Quintos, Jr. at the time of his death, as a young "training assistant" in
the Bacnotan Cement Industries, Inc. In other words, unlike the Alcantara case, on which petitioner
relies, the lower courts did not consider, in the present case, Policronio's potentiality and capacity to
increase his future income. Indeed, upon the conclusion of his training period, he was supposed to
have a better job and be promoted from time to time, and, hence, to earn more, if not considering
the growing importance of trade, commerce and industry and the concomitant rise in the income
level of officers and employees therein much more.
Damages consist, not of the full amount of his earnings, but of the support, they received or
would have received from him had he not died in consequence of the negligence of petitioner's
agent. In fixing the amount of that support, We must reckon with the "necessary expenses of his own
living", which should be deducted from his earnings. Only net earnings, not gross earning, are to be
considered that is, the total of the earnings less expenses necessary in the creation of such earnings
or income and less living and other incidental expenses.
All things considered, We are of the opinion that it is fair and reasonable to fix the
deductible living and other expenses of the deceased at the sum of P1,184.00 a year, or about
P100.00 a month, and that, consequently, the loss sustained by his sisters may be roughly estimated
at P1,000.00 a year or P33,333.33 for the 33-1/3 years of his life expectancy. To this sum of
P33,333.33, the following should be added: (a) P12,000.00, pursuant to Arts. 104 and 107 of the
Revised Penal Code, in relation to Article 2206 of our Civil Code, as construed and applied by this
Court; (b) P1,727.95, actually spent by private respondents for medical and burial expenses; and (c)
attorney's fee, which was fixed by the trial court, at P500.00, but which, in view of the appeal taken
by petitioner herein, first to the Court of Appeals and later to this Supreme Court, should be
increased to P2,500.00. In other words, the amount adjudged in the decision appealed from should
be reduced to the aggregate sum of P49,561.28, with interest thereon, at the legal rate, from
December 29, 1961, date of the promulgation of the decision of the trial court.
Korean Airlines Co., Ltd vs. CA 234 SCRA 717 Aug. 3, 1994
Facts:
JuanitoLapuz was contracted for employment in Saudi Arabia through Pan Pacific Recruiting
Services, Inc. He was supposed to leave via Korean Airlines, but was initially listed as a “chance
passenger”. According to Lapuz, he was allowed to check in and was cleared for departure. When he
was on the stairs going to the airplane, a KAL officer pointed at him and shouted, “Down! Down!” and
he was barred from taking the flight. When he asked for another booking, his ticket was cancelled. He
was unable to report for work and so he lost his employment. KAL alleged that the agent of Pan
Pacific was informed that there are 2 seats possibly available. He gave priority to Perico, while the
other seat was won by Lapuz through lottery. But because only 1 seat became available, it was given
to Perico. The trial court adjudged KAL liable for damages. The decision was affirmed by the Court of
Appeals, with modification on the damages awarded.
Issues:
(1) Whether there is already a contract of carriage between KAL and Lapuz to hold KAL liable for
breach of contract
(2) Whether moral and exemplary damages should be awarded, and to what extent
Held:
(1) The status of Lapuz as standby passenger was changed to that of a confirmed passenger
when his name was entered in the passenger manifest of KAL for its Flight No. KE 903. His clearance
through immigration and customs clearly shows that he had indeed been confirmed as a passenger of
KAL in that flight. KAL thus committed a breach of the contract of carriage between them when it
failed to bring Lapuz to his destination. A contract to transport passengers is different in kind and
degree from any other contractual relation. The business of the carrier is mainly with the traveling
public. It invites people to avail themselves of the comforts and advantages it offers. The contract of
air carriage generates a relation attended with a public duty. Passengers have the right to be treated
by the carrier's employees with kindness, respect, courtesy and due consideration. They are entitled
to be protected against personal misconduct, injurious language, indignities and abuses from such
employees. So it is that any discourteous conduct on the part of these employees toward a passenger
gives the latter an action for damages against the carrier. The breach of contract was aggravated in
this case when, instead of courteously informing Lapuz of his being a "wait-listed" passenger, a KAL
officer rudely shouted "Down! Down!" while pointing at him, thus causing him embarrassment and
public humiliation. The evidence presented by Lapuz shows that he had indeed checked in at the
departure counter, passed through customs and immigration, boarded the shuttle bus and
proceeded to the ramp of KAL's aircraft. In fact, his baggage had already been loaded in KAL's aircraft,
to be flown with him to Jeddah. The contract of carriage between him and KAL had already been
perfected when he was summarily and insolently prevented from boarding the aircraft.
(2) The Court of Appeals granted moral and exemplary damages because:
a. The findings of the court a quo that the defendant-appellant has committed breach of
contract of carriage in bad faith and in wanton, disregard of plaintiff-appellant's rights as passenger
laid the basis and justification of an award for moral damages.
b. In the instant case, we find that defendant-appellant Korean Air Lines acted in a wanton,
fraudulent, reckless, oppressive or malevolent manner when it "bumped off" plaintiff-appellant on
November 8, 1980, and in addition treated him rudely and arrogantly as a "pataygutomna contract
worker fighting Korean Air Lines," which clearly shows malice and bad faith, thus entitling plaintiff-
appellant to moral damages.
c. Considering that the plaintiff-appellant's entitlement to moral damages has been fully
established by oral and documentary evidence, exemplary damages may be awarded. In fact,
exemplary damages may be awarded, even though not so expressly pleaded in the complaint. By the
same token, to provide an example for the public good, an award of exemplary damages is also
proper.
A review of the record of this case shows that the injury suffered by Lapuz is not so serious
or extensive as to warrant an award of P1.5 million. The assessment of P100,000 as moral and
exemplary damages in his favor is, in our view, reasonable and realistic.
Chapter Three : Other Kinds of Damages
George Mckee and Araceli Koh Mckee vs. IAC et al, G.R. No. L-68102 July 16. 1992 (Consolidated
case with the case of Carmen Dayrit et al vs. IAC, G.R. No. L-68103 July 16, 1992)
FACTS:
Between 9 & 10 o'clock in the morning of 8 January 1977, in Pulong Pulo Bridge along
MacArthur Highway, between Angeles City & San Fernando, Pampanga, a head-on-collision took
place between an International cargo truck, Loadstar owned by private respondents, and driven by
Ruben Galang, and a Ford Escort car driven by Jose Koh. The collision resulted in the deaths of Jose
Koh, Kim Koh McKee and Loida Bondoc, and physical injuries to George Koh McKee, Christopher Koh
McKee and Araceli Koh McKee, all passengers of the Ford Escort. Jose Koh was the father of
petitioner Araceli Koh McKee, the mother of minors George, Christopher and Kim Koh McKee. Loida
Bondoc, on the other hand, was the baby sitter of 1 1/2 year old Kim. At the time of the collision, Kim
was seated on the lap of Loida Bondoc who was at the front passenger's seat of the car while Araceli
and her two (2) sons were seated at the car's back seat. Immediately before the collision, the cargo
truck, which was loaded with two hundred (200) cavans of rice weighing about 10,000 kilos, was
travelling southward from Angeles City to San Fernando Pampanga, and was bound for Manila. The
Ford Escort, on the other hand, was on its way to Angeles City from San Fernando. When the
northbound car was about (10) meters away from the southern approach of the bridge, two (2) boys
suddenly darted from the right side of the road and into the lane of the car. The boys were moving
back and forth, unsure of whether to cross all the way to the other side or turn back. Jose Koh blew
the horn of the car, swerved to the left and entered the lane of the truck; he then switched on the
headlights of the car, applied the brakes and thereafter attempted to return to his lane. Before he
could do so, his car collided with the truck. The collision occurred in the lane of the truck, which was
the opposite lane, on the said bridge (lasque, mervin’s digest).
ISSUE:
Whether or not the herein truck driver can be held liable under the doctrine of last clear
chance.
RULING:
The court ruled that it was the truck driver's negligence in failing to exert ordinary care to
avoid the collision which was, in law, the proximate cause of the collision. The court had the occasion
to apply the doctrine of the last clear chance which expound that the negligence of a claimant does
not preclude a recovery for the negligence of defendant where it appears that the latter, by
exercising reasonable care and prudence, might have avoided injurious consequences to claimant
notwithstanding his negligence. The doctrine applies only in a situation where the plaintiff was guilty
of prior or antecedent negligence but the defendant, who had the last fair chance to avoid the
impending harm and failed to do so, is made liable for all the consequences of the accident
notwithstanding the prior negligence of the plaintiff. The subsequent negligence of the defendant in
failing to exercise ordinary care to avoid injury to plaintiff becomes the immediate or proximate
cause of the accident which intervenes between the accident and the more remote negligence of the
plaintiff, thus making the defendant liable to the plaintiff. Generally, the last clear chance doctrine is
invoked for the purpose of making a defendant liable to a plaintiff who was guilty of prior or
antecedent negligence, although it may also be raised as a defense to defeat claim (sic) for damages.
The court herein also imposed liability on the private respondents as employers of the truck driver
under Article 2180 of the Civil Code are directly and primarily liable for the resulting damages. The
presumption that they are negligent flows from the negligence of their employee. That presumption,
however, is only juris tantum, not juris et de jure. Their only possible defense is that they exercised
all the diligence of a good father of a family to prevent the damage.
Wassmer vs. Velez 12 SCRA 648, Dec 26, 1964
Doctrine:
As stated, mere breach of promise to marry is not an actionable wrong. But to formally set a
wedding and go through all the above-described preparation, and publicity, only to walk out of it
when the matrimony is about to be solemnized, is quite different.
Facts:
On August 23, 1954 plaintiff and defendant applied for a license to contract marriage, which
was subsequently issued. Their wedding was set for September 4, 1954. Invitations were printed and
distributed to relatives, friends and acquaintances. The bride-to-be's trousseau, party dresses and
other apparel for the important occasion were purchased. Dresses for the maid of honor and the
flower girl were prepared. A matrimonial bed, with accessories, was bought. Bridal showers were
given and gifts received.
And then, with but two days before the wedding, defendant, who was then 28 years old,
simply left a note for plaintiff stating: "Will have to postpone wedding-My mother opposes it . . ." He
enplaned to his home city in Mindanao, and the next day, the day before the wedding, he wired
plaintiff: "Nothing changed rest assured returning soon". But he never returned and was never heard
from again. Sued by Beatriz for damages, Velez filed no answer and was declared in default.
Issue:
WON moral damages as recoverable
Ruling:
"Mere breach of a promise to marry" is not an actionable wrong. However, that the extent
to which acts not contrary to law may be perpetrated with impunity, is not limitless for Article 21 of
said Code provides that "Any person who willfully causes loss or injury to another in a manner that is
contrary to morals, good customs or public policy shall compensate the latter for the damage".
Surely this is not a case of mere breach of promise to marry. As stated, mere breach of
promise to marry is not an actionable wrong. But to formally set a wedding and go through all the
above-described preparation, and publicity, only to walk out of it when the matrimony is about to be
solemnized, is quite different. This is palpably and unjustifiably contrary to good customs, for which
defendant must be held answerable in damages in accordance with Article 21 aforesaid.
Per express provision of Article 2219 (10) of the new Civil Code, moral damages are
recoverable in the cases mentioned in Article 21 of said Code. As to exemplary damages, defendant
contends that the same could not be adjudged against him because under Article 2232 of the new
Civil Code the condition precedent is that "the defendant acted in a wanton, fraudulent, reckless,
oppressive, or malevolent manner". The argument is devoid of merit as under the above-narrated
circumstances of this case defendant clearly acted in a "wanton . . . reckless [and] oppressive
manner." This Court's opinion, however, is that considering the particular circumstances of this case,
P15,000.00 as moral and exemplary damages is deemed to be a reasonable award.
Cachero vs. Manila Yellow Taxicab 101 Phil 523
Facts:
On December 13, 1952, Atty. Tranquilino Cachero boarded a Yellow Taxi driven by Gregorio
Mira Abinion. The taxicab bumped a Meralco post. The plaintiff fell out of the vehicle to the ground
and sustained slight physical injuries. On January 6, 1953, plaintiff wrote a letter to the defendant,
demanding payment for the sum of P79, 245.65 covering actual transportation and medical expenses,
monetary loss, compensatory and exemplary damages. Defendant offered to settle the case
amicably, but the parties were not able to agree on the settlement amount. Plaintiff instituted an
action for damages on February 2, 1953. The Court of First Instance awarded: (1) P700 for medical
and transportation expenses, (2) P3,200 unearned professional fees, and (3) P2,000 moral damages.
The plaintiff filed this instant appeal.
Issue:
Whether moral damages can be awarded
Held:
A mere perusal of plaintiff complaint will show that his action against the defendant is
predicated on an alleged breach of contract of carriage, i.e., the failure of the defendant to bring him
"safely and without mishaps" to his destination, and it is to be noted that the chauffeur of
defendant's taxicab that plaintiff used when he received the injuries involved herein, Gregorio Mira,
has not even been made a party defendant to this case. The defendant herein has not committed in
connection with this case any "criminal offense resulting in physical injuries". The one that committed
the offense against the plaintiff is Gregorio Mira, and that is why he has been already prosecuted and
punished therefor. We, therefore, hold that the case at bar does not come within the exception of
paragraph 1, Article 2219 of the Civil Code. In view of the foregoing the sum of P2,000 awarded as
moral damages by the trial Court has to be eliminated, for under the law it is not a compensation
awardable in a case like the one at bar.
Fores vs. Miranda 105 Phil 266
Facts:
Defendant-petitioner Paz Fores brings this petition for review of the decision of the court of
appeals awarding to plaintiff-respondent Ireneo Miranda the sums of P5000 by way of actual
damages and counsel fees, and P10,000 as moral damages. Story goes, respondent was a passenger
on a jeepney driven by Eugenio Luga. While the jeepney was descending Sta.Mesa Bridge, at an
excessive rate of speed, the driver lost control and hit the bridge wall. 5 passengers including the
respondent suffered injuries. Respondent for emphasis suffered a fracture on the upper right
humerus to which he underwent 3 surgeries at the Orthopedic Hospital. The first was to attach wire
loops were wound around the bones and screwed in place, the second, to insert a metal splint, and
the third, to remove such splint. The driver was charged with serious physical injuries through
reckless imprudence, and was convicted thereof because he pleaded guilty. The jeepney on the
otherhand was registered under the name of Paz Fores. The vehicle even had the name plainted
below its windshield. Petitioner contended that one day before the accident, she allegedly sold the
passenger jeep that was involved therein to a certain Carmen Sackerman. The question interposed by
petitioner is whether or not 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. The
petitioner seems to argue that if it was valid then petitioner should not be made liable. The SC also
passed upon the justness of the damages awarded in particular moral damages.
Issue:
Whether or not 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.
Whether or not the moral damages may be awarded in this case.
Held:
The court of appeals found that the alleged sale was merely dubious and fake, but still
answered the query in the affirmative. A transfer contemplated by the law if made without the
requisite approval of the public service commission is not effective and binding in so far as the
responsibility of the grantee under the franchise in relation to the public is concerned. It does not
contemplate the vehicle itself, but rather the fact that the vehicle shall be used to engage in public
service, as public service property.
No, moral damages are generally not recoverable in damage actions predicated on a breach of the
contract of transportation, in view of Articles 2219, 2220 and 2176 of the New Civil Code.
Article 2219: Moral damages may be recovered in the ff analogous cases: 1) A criminal offense
resulting in physical injuries; 2) quasi-delicts causing physical injuries.
Article 2220, Will 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. Article 2176 Whoever by
act or omission causes damage to another there being fault or negligence, is obliged to pay for the
damage done. Such fault or negligence, if there is no pre-existing contractual relation between the
parties is called a quasi-delict, and is governed by the provisions of this chapter.
Hence with the above, we realize that: 1) to recover moral damages from breach of contract,
there must be proof of bad faith, fraud or deliberate injurious conduct; 2) breach of contract however
does not fall under the term “analogous cases” in article 2219, because of the definition of quasi-
delict in Article 2176 expressly excludes cases where there is a pre-existing contractual relation bet.
the parties. In this case, there is a contract. To recover moral damages though we resort to Article
1764.
The exception to the rule however is Article 1764, which makes the common carrier
expressly subject to the rule of Article 2206 that entitles the spouse, descendants, and ascendants of
the deceased passenger to demand moral damages for mental anguish by reason of death of the
deceased. Hence, in summation – where the passenger does not die, moral damages are not
recoverable, unless it is proved that the carrier was guilty of malice or bad faith. In this case, there is
no showing of malice or bad faith. Even the in cases of injury, the presumption against the common
carrier is just negligence and not malicious. Since in this case, Miranda is still alive, and no evidence
proves maliciousness, the award of moral damage must be dropped. The actual and attorneys fees
amounting to P2000 is deemed fair.
Tan vs. Northwest Airlines Inc., 327 SCRA 263
DOCTRINE:
Where in breaching the contract of carriage the defendant 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 obligation which the parties had foreseen or could have reasonably foreseen. In that
case, such liability does not include moral and exemplary damages.
FACTS:
On May 31, 1994, Priscilla L. Tan and Connie Tan boarded Northwest Airlines Flight 29 in
Chicago, U. S. A. bound for the Philippines and arrived at the NAIA on June 1, 1994 at about 10:40 in
the evening.Upon their arrival, petitioner and her companion found that their baggages were missing.
They returned to the airport in the evening of the following day and they were informed that their
baggages might still be in another plane in Tokyo, Japan. On June 3, 1994, they recovered their
baggages and discovered that some of its contents were destroyed and soiled.
PETITIONER’S CONTENTION:
Claiming that they "suffered mental anguish, sleepless nights and great damage" because of
Northwest's failure to inform them in advance that their baggages would not be loaded on the same
flight they boarded and because of their delayed arrival, they demanded from Northwest Airlines
compensation for the damages they suffered. Petitioner sent demand letter to Northwest Airlines,
but the latter did not respond.
RESPONDENT’S CONTENTION:
Northwest Airlines did not deny that the baggages of petitioners were not loaded,
interposing as defense that they could not be carried on the same flight because of "weight and
balance restrictions." However, the baggages were loaded in another flight, which arrived in the
evening of June 2, 1994.When petitioner received her baggages in damaged condition, Northwest
offered to either (1) reimburse the cost or repair of the bags; or (2) reimburse the cost for the
purchase of new bags, upon submission of receipts. Furthermore, they deny the presence of bad faith
or malice in dealing with the missing luggage so as to warrant the award of moral and exemplary
damages.
ISSUE:
Whether respondent is liable for moral and exemplary damages for willful misconduct and
breach of the contract of air carriage.
RULING:
TRIAL COURT:GRANTED. The trial court found the respondent guilty of breach of contract of
carriage and willful misconduct, hence ordering Northwest to pay actual, moral and exemplary
damages, as well as attorney’s fees and other costs.
CA: PARTIALLY GRANTED. On appeal by Northwest, the Court of Appeals declared that
respondent was not guilty of willful misconduct in the absence of showing that the acts complained
of were impelled by an intention to violate the law, or were in persistent disregard of one's rights.
Award for moral and exemplary damages were deleted. Attorney’s fees were equitably reduced.
SC:DENIED. The Supreme Court affirms the CA ruling. Respondent indeed failed to deliver
petitioner's luggages on time, however, there was no showing of malice in such failure. Bad faith does
not simply connnote bad judgment or negligence, it imports a dishonest purpose or some moral
obliquity and conscious doing of a wrong, a breach of known duty through some motive or interest or
ill-will that partakes of the nature of fraud. In this case, due to weight and balance restrictions
(e.g.aircraft used for the flight gas input, passenger and crew load, baggage weight, all in relation to
the wind factor anticipated on the flight), as a safety measure, respondent airline had to transport
the baggages on a different flight, but with the same expected date and time of arrival in the
Philippines.
Where in breaching the contract of carriage the defendant 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 obligation which the parties had foreseen or could have reasonably foreseen. In that
case, such liability does not include moral and exemplary damages.
Alitalia vs. IAC 192 SCRA 9
Facts:
Dr. Felipa Pablo, an associate professor in the University of the Philippines and a research
grantee of the Philippine Atomic Energy Agency, was invited to take part at a meeting of the
Department of Research and Isotopes in Italy in view of her specialized knowledge in “foreign
substances in food and the agriculture environment”. She would be the second speaker on the first
day of the meeting. Dr. Pablo booked passage on petitioner Alitalia. She arrived in Milan on the day
before the meeting, but was told that her luggage was delayed and was in a succeeding flight from
Rome to Milan. The luggage included her materials for the presentation. The succeeding flights did
not carry her luggage. Desperate, she went to Rome to try to locate the luggage herself, but to no
avail. She returned to Manila without attending the meeting. She demanded reparation for the
damages. She rejected Alitalia’s offer of free airline tickets and commenced an action for damages. As
it turned out, the luggage was actually forwarded to Ispra, but only a day after the scheduled
appearance. It was returned to her after 11 months. The trial court ruled in favor of Dr. Pablo, and
this was affirmed by the Court of Appeals.
Issues:
(1) Whether the Warsaw Convention should be applied to limit Alitalia’s liability
(2) Whether Dr. Pablo is entitled to nominal damages
Held:
(1) Under the Warsaw Convention, an air carrier is made liable for damages for:
a. The death, wounding or other bodily injury of a passenger if the accident causing it took
place on board the aircraft or I the course of its operations of embarking or disembarking;
b. The destruction or loss of, or damage to, any registered luggage or goods, if the
occurrence causing it took place during the carriage by air; and
c. Delay in the transportation by air of passengers, luggage or goods.
The convention however denies to the carrier availment of the provisions which exclude or
limit his liability, if the damage is caused by his wilful misconduct, or by such default on his part as is
considered to be equivalent to wilful misconduct. The Convention does not thus operate as an
exclusive enumeration of the instances of an airline's liability, or as an absolute limit of the extent of
that liability. It should be deemed a limit of liability only in those cases where the cause of the death
or injury to person, or destruction, loss or damage to property or delay in its transport is not
attributable to or attended by any wilful misconduct, bad faith, recklessness, or otherwise improper
conduct on the part of any official or employee for which the carrier is responsible, and there is
otherwise no special or extraordinary form of resulting injury.
In the case at bar, no bad faith or otherwise improper conduct may be ascribed to the
employees of petitioner airline; and Dr. Pablo's luggage was eventually returned to her, belatedly, it is
true, but without appreciable damage. The fact is, nevertheless, that some species of injury was
caused to Dr. Pablo because petitioner ALITALIA misplaced her baggage and failed to deliver it to her
at the time appointed - a breach of its contract of carriage. Certainly, the compensation for the injury
suffered by Dr. Pablo cannot under the circumstances be restricted to that prescribed by the Warsaw
Convention for delay in the transport of baggage.
(2) She is not, of course, entitled to be compensated for loss or damage to her luggage. She
is however entitled to nominal damages which, as the law says, is adjudicated in order that a right of
the plaintiff, which has been violated or invaded by the defendant, may be vindicated and
recognized, and not for the purpose of indemnifying the plaintiff that for any loss suffered and this
Court agrees that the respondent Court of Appeals correctly set the amount thereof at PhP
40,000.00.
The Court also agrees that respondent Court of Appeals correctly awarded attorney’s fees to
Dr. Pablo and the amount of PhP 5,000.00 set by it is reasonable in the premises. The law authorizes
recovery of attorney’s fees inter alia where, as here, the defendant’s act or omission has compelled
the plaintiff to litigate with third persons or to incur expenses to protect his interest or where the
court deems it just and equitable.
Saludo vs. CA 207 SCRA 498
The carrier has the right to accept shipper's marks as to the contents of the package offered
for transportation and is not bound to inquire particularly about them in order to take advantage of a
false classification and where a shipper expressly represents the contents of a package to be of a
designated character, it is not the duty of the carrier to ask for a repetition of the statement nor
disbelieve it and open the box and see for itself.
Facts:
Petitioners herein together with Pomierski and Son Funeral Home of Chicago brought the
remains of petitioners’ mother to Continental Mortuary Air Services (CMAS) which booked the
shipment of the remains from Chicago to San Francisco by Trans World Airways (TWA) and from San
Francisco to Manila with Philippine Airlines (PAL).
 The remains were taken to the Chicago Airport, but it turned out that there were two (2)
bodies in the said airport. Somehow the two (2) bodies were switched, and the remains of
petitioners’ motherwas shipped to Mexico instead.
The shipment was immediately loaded on another PAL flight and it arrived the day after the
expected arrival. Petitioners filed a claim for damages in court. Petitioners consider TWA's statement
that "it had to rely on the information furnished by the shipper" a lame excuse and that its failure to
prove that its personnel verified and identified the contents of the casket before loading the same
constituted negligence on the part of TWA. The lower court absolved both airlines and upon appeal it
was affirmed by the court.
Issue:
Whether or not private respondents is liable for damages for the switching of the two
caskets.
Ruling:
No. The Supreme Court concluded that the switching occurred or, more accurately, was
discovered on October 27, 1976; and based on the above findings of the Court of appeals, it
happened while the cargo was still with CMAS, well before the same was place in the custody of
private respondents.Verily, no amount of inspection by respondent airline companies could have
guarded against the switching that had already taken place. Or, granting that they could have opened
the casket to inspect its contents, private respondents had no means of ascertaining whether the
body therein contained was indeed that of CrispinaSaludo except, possibly, if the body was that of a
male person and such fact was visually apparent upon opening the casket. However, to repeat,
private respondents had no authority to unseal and open the same nor did they have any reason or
justification to resort thereto.
It is the right of the carrier to require good faith on the part of those persons who deliver
goods to be carried, or enter into contracts with it, and inasmuch as the freight may depend on the
value of the article to be carried, the carrier ordinarily has the right to inquire as to its value.
Ordinarily, too, it is the duty of the carrier to make inquiry as to the general nature of the articles
shipped and of their value before it consents to carry them; and its failure to do so cannot defeat the
shipper's right to recovery of the full value of the package if lost, in the absence of showing of fraud
or deceit on the part of the shipper. In the absence of more definite information, the carrier has a the
right to accept shipper's marks as to the contents of the package offered for transportation and is not
bound to inquire particularly about them in order to take advantage of a false classification and
where a shipper expressly represents the contents of a package to be of a designated character, it is
not the duty of the carrier to ask for a repetition of the statement nor disbelieve it and open the box
and see for itself. However, where a common carrier has reasonable ground to suspect that the
offered goods are of a dangerous or illegal character, the carrier has the right to know the character
of such goods and to insist on an inspection, if reasonable and practical under the circumstances, as a
condition of receiving and transporting such goods.
It can safely be said then that a common carrier is entitled to fair representation of the
nature and value of the goods to be carried, with the concomitant right to rely thereon, and further
noting at this juncture that a carrier has no obligation to inquire into the correctness or sufficiency of
such information.The consequent duty to conduct an inspection thereof arises in the event that there
should be reason to doubt the veracity of such representations. Therefore, to be subjected to unusual
search, other than the routinary inspection procedure customarily undertaken, there must exist proof
that would justify cause for apprehension that the baggage is dangerous as to warrant exhaustive
inspection, or even refusal to accept carriage of the same; and it is the failure of the carrier to act
accordingly in the face of such proof that constitutes the basis of the common carrier's liability.
In the case at bar, private respondents had no reason whatsoever to doubt the truth of the
shipper's representations. The airway bill expressly providing that "carrier certifies goods received
below were received for carriage," and that the cargo contained "casketed human remains of
CrispinaSaludo," was issued on the basis of such representations. The reliance thereon by private
respondents was reasonable and, for so doing, they cannot be said to have acted negligently.
Likewise, no evidence was adduced to suggest even an iota of suspicion that the cargo presented for
transportation was anything other than what it was declared to be, as would require more than
routine inspection or call for the carrier to insist that the same be opened for scrutiny of its contents
per declaration.
Nonetheless, the facts show that petitioners' right to be treated with due courtesy in accordance with
the degree of diligence required by law to be exercised by every common carrier was violated by
TWA and this entitles them, at least, to nominal damages from TWA alone. Articles 2221 and 2222 of
the Civil Code make it clear that nominal damages are not intended for indemnification of loss
suffered but for the vindication or recognition of a right violated of invaded.
Prudencio vs. Alliance Transport System Inc., 148 SCRA 440
DOCTRINE/S:
Moral damages include physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. Though
incapable of pecuniary computation, moral damages may be recovered if they are the proximate
result of defendant's wrongful act or omission. (People v. Baylon, 129 SCRA 62 [1984]).
It is undisputed that the trial courts are given discretion to determine the amount of moral
damages (Alcantara v. Surro, 93 Phil. 472) and that the Court of Appeals can only modify or change
the amount awarded when they are palpably and scandalously excessive "so as to indicate that it was
the result of passion, prejudice or corruption on the part of the trial court (Gellada v. Warner Barnes
& Co., Inc., 57 O.G. (4) 7347, 7358; Sadie v. Bachrach Motors Co., Inc., 57 O.G. (4) 636 and Adone v.
Bachrach Motor Co., Inc., 57 O.G. 656). But in more recent cases where the awards of moral and
exemplary damages are far too excessive compared to the, actual losses sustained by the aggrieved
party, this Court ruled that they should be reduced to more reasonable amounts.(TEST OF
REASONABLENESS)

In the case of San Andres v. Court of Appeals (116 SCRA 85 [1982]) the Supreme Court ruled
that while the amount of moral damages is a matter left largely to the sound discretion of a court, the
same when found excessive should be reduced to more reasonable amounts, considering the
attendant facts and circumstances. Moral damages, though incapable of pecuniary estimation, are in
the category of an award designed to compensate the claimant for actual injury suffered and not to
impose a penalty on the wrongdoer.
In (Siguenza v. Court of Appeals, 137 SCRA 578-579 [1985]), the Supreme court, reiterating
the above ruling, reduced the awards of moral and exemplary damages which were far too excessive
compared to the actual losses sustained by the aggrieved parties and where the records show that
the injury suffered was not serious or gross and, therefore, out of proportion to the amount of
damages generously awarded by the trial court.
"Moral damages are emphatically not intended to enrich a complainant at the expense of a
defendant. They are awarded only to enable the injured party to obtain means, diversion or
amusements that will serve to alleviate the moral suffering he has undergone, by reason of the
defendants' culpable action." The award of moral damages must be proportionate to the suffering
inflicted & B Surety & Insurance Co., Inc. v. Intermediate Appellate Court, 129 SCRA 745 [1984] citing
Grand Union Supermarket, Inc. v. Espino, Jr., 94 SCRA 966).
FACTS:
Dra. Sofia L. Prudenciado was driving her own Chevrolet Bel Air car along Arroceros Street
with the intention of crossing Taft Avenue in order to turn left, to go to the Philippine Normal College
Compound where she would hold classes. She claimed that she was driving her car at the rate of 10
kmph; that before crossing Taft Ave. she stopped her car and looked to the right and to the left and
not noticing any on-coming vehicle on either side she slowly proceeded on first gear to cross the
same, but when she was almost at the center, near the island thereof, Jose Leyson who was driving
People's Taxicab owned and operated by Alliance Transport System, Inc., suddenly bumped and
struck Dra. Prudenciado's car, thereby causing physical injuries in different parts of her body,
suffering more particularly brain concussion which subjected her to several physical examinations
and to an encephalograph test while her car was damaged to the extent of P2,451.27. The damage to
the taxicab amounted to P190.00.
Dra. Prudenciado filed a complaint for damages at the Court of First Instance against the
Alliance Transport System and Jose Leyson.
RTC-ordered the defendants, jointly and severally, to pay the plaintiff the sum of P2,451.27
for actual damages representing the cost for the repair of the car of plaintiff; P25,000.00 as moral
damages; CA- reduced the award of MORAL DAMAGES from 25k to 2k.
ISSUE:
W/N the CA is correct in reducing the award of moral damages from 25k to 2k.
HELD:
YES, the damages should be reduced to more reasonable levels. It is undisputed that the trial
courts are given discretion to determine the amount of moral damages (Alcantara v. Surro, 93 Phil.
472) and that the Court of Appeals can only modify or change the amount awarded when they are
palpably and scandalously excessive "so as to indicate that it was the result of passion, prejudice or
corruption on the part of the trial court (Gellada v. Warner Barnes & Co., Inc., 57 O.G. (4) 7347, 7358;
Sadie v. Bachrach Motors Co., Inc., 57 O.G. (4) 636 and Adone v. Bachrach Motor Co., Inc., 57 O.G.
656). But in more recent cases where the awards of moral and exemplary damages are far too
excessive compared to the, actual losses sustained by the aggrieved party, this Court ruled that they
should be reduced to more reasonable amounts.
Further, the court cited the case of (Siguenza v. Court of Appeals, 137 SCRA 578-579 [1985]),
the Supreme court, reiterating the above ruling, reduced the awards of moral and exemplary
damages which were far too excessive compared to the actual losses sustained by the aggrieved
parties and where the records show that the injury suffered was not serious or gross and, therefore,
out of proportion to the amount of damages generously awarded by the trial court.
Coming back to the case at bar, a careful review of the records makes it readily apparent
that the injuries sustained by Dra. Prudenciado are not as serious or extensive as they were claimed
to be, to warrant the damages awarded by the trial court. In fact, a closer scrutiny of the exhibits
showing a moderate damage to the car can by no stretch of the imagination produce a logical
conclusion that such disastrous effects of the accident sought to be established, actually took place,
not to mention the fact that such were not supported by the medical findings presented.
Unquestionably, therefore, the damages imposed' by the lower court should be reduced to more
reasonable levels.
On the other hand, it will be observed that the reduction of the damages made by the Court
of Appeals is both too drastic and unrealistic, to pass the test of reasonableness, which appears to be
the underlying basis to justify such reduction.
While the damages sought to be recovered were not satisfactorily established to the extent
desired by the petitioner, it was nonetheless not disputed that an accident occurred due to the fault
and negligence of the respondents; that Dra. Prudenciado suffered a brain concussion which although
mild can admittedly produce the effects complained of by her and that these symptoms can develop
after several years and can lead to some, serious handicaps or predispose the patient to other
sickness (TSN, July 13, 1960, pp. 52-54). Being a doctor by profession, her fears can be more real and
intense than an ordinary person. Otherwise stated, she is undeniably a proper recipient of moral
damages which are proportionate to her suffering.
The SC MODIFIED insofar as the award of damages is concerned; and respondents are
ordered to jointly and severally pay the petitioner; sum of P15,000.00 as moral damages.
Lopez vs. Pan American World Airways 16 SCRA 431
FACTS:
Sen Fernando Lopez, his wife, his son-in-law, and his daughter made reservations, through
their agency, for first class accommodations in the Tokyo – San Francisco flight of PAN-AM. PAN-AM's
SF head office confirmed the reservations. First class tickets were subsequently issued, with the total
fare having been fully paid before this.- As scheduled, they left Manila and as soon as they arrived in
Tokyo, they contacted PAN-AM's Tokyo office regarding their accommodations. For the given reason
that the first class seats were all booked up, PAN-AM's Tokyo office informed them that they could
not go in that flight unless they took the tourist class. Due to pressing engagements in the US, they
were constrained to take PAN-AM's flight as tourist passengers.- Sen Lopez filed suit for damages
alleging breach of contracts in bad faith by defendant out of racial prejudice against Orientals.
He asked for P500T actual and moral damages, P100T exemplary damages, P25Tattorney's
fees plus costs.- PAN-AM asserted that its failure to provide first class accommodations to plaintiffs
was due to honest error of its employees. It interposed a counterclaim for atty's fees of P25T.- CFI
Rizal decision: in favor of plaintiff and granted (a) P100Tmoral damages; (b)P20T,exemplarydamages;
(c) P25T, atty's fees, and costs of the action.- Plaintiffs filed MFR asking that moral damages be
increased to P400T and for 6% interest per annum on amount to be granted.- CFI modified decision:
(a)P150T, moral damages; (b) P25T, exemplary damages; with legal interest on both from date of
filing of complaint until paid; (c)P25T,atty's fees; and costs of the action.- Both appealed: PAN-AM
contended that there was NO bad faith; Lopez et al wanted a total of P650T as award for damages.
ISSUES:
1. WON there was bad faith on the part of PAN-AM
2. WON the amount of damages should be increased
HELD:
1. YES. Defendant — through its agents — first cancelled plaintiffs, reservations by mistake
and thereafter deliberately and intentionally withheld from plaintiffs their travel agent such
information. In so misleadingplaintiffs into purchasing first class tickets in theconviction that they had
confirmed reservations, when in fact they had none, defendant wilfully and knowingly placed itself
into the position of having to breach its contracts with plaintiffs should there be no last-minute
cancellation by other passengers before flight time, as it turned out in this case. Bad faith means a
breach of a known duty through some motive of
interest or ill-will. - At any rate, granting all the mistakes advanced by the defendant, there would at
least be negligence so gross and reckless as to amount to malice or bad faith.
2. YES. Moral damages are recoverable in breach of contracts where the defendant acted
fraudulently or in bad faith (Art. 2220). Exemplary or corrective damages may be imposed by way of
example or correction for the public good, in breach of contract where the defendant acted in a
wanton, fraudulent, reckless, oppressive or malevolent manner (Art. 2229, 2232). A written contract
for an attorney's services shall control the amount to be paid there for unless found by the court to
be unconscionable or unreasonable (Sec. 24,Rule 138, ROC).
- Factors in determining Amount for Moral Damages:
The amount of damages awarded in this appeal has been determined by adequately considering the
official, political, social, and financial standing of the offended parties on one hand, and the business
and financial position of the offender on the other. The present rate of exchange and the terms at
which the amount of damages awarded would approximately be in U.S. dollars has also been
considered.
(a) MORAL DAMAGES
- As a proximate result of defendant's breach in bad faith of its contracts with plaintiffs, the latter
suffered social humiliation, wounded feelings, serious anxiety and mental anguish. It may not be
humiliating to travel as tourist passengers; it is humiliating to be compelled to travel as such, contrary
to what is rightfully to be expected from the contractual undertaking.- Sen Lopez was then Senate
President Pro Tempore. International carriers like defendant know the prestige of such an office. For
the Senate is not only the Upper Chamber of the Philippine Congress, but the nation's treaty-ratifying
body. He was also former Vice-President of the Philippines. (MD = P100T)- Mrs. Maria Lopez, as wife
of the Senator, shared his prestige and therefore his humiliation. In addition she suffered physical
discomfort during the 13-hour trip; her reason for going to the US was actually for medical check-up
and relaxation. The fact that the seating spaces in the tourist class are quite narrower than in first
class will suffice to show that she indeed experienced physical suffering during the trip. (MD =P50T)-
Mr. and Mrs. Alfredo Montelibano, Jr., were travelling as immediate members of the family of Sen
Lopez. Even if they initially wanted to change their seatreservations from first class to tourist class,
theyeventually paid for first class seats. Hence, they also suffered social humiliation. (MD = P25T
each)
(b) EXEMPLARY DAMAGES
- In view of its nature, it should be imposed in such an amount as to effectively deter similar
breach of contracts in the future by defendant or other airlines.(ED = P75T)
(c) ATTORNEY’S FEES
- Record shows a written contract of services wherein plaintiffs engaged the services of their
counsel — Atty. Francisco — and agreed to pay the sum of P25T upon the termination of the case in
the CFI, and anotherP25T if case is appealed to the SC. This is reasonableconsidering the subject
matter of the presentcontroversy, the professional standing of the attorney or plaintiffs-appellants,
and the extent of the service rendered by him.
Judgment appealed from is hereby MODIFIED so as to award in favor of plaintiffs and
against defendant, the following:(1) P200T as moral damages, divided among plaintiffs;(2) P75T
as exemplary or corrective damages;(3) Interest at the legal rate of 6% per annum on the moral and
exemplary damages, from date of amended CFI decision, until said damages are fully paid;(4) P50T as
attorney's fees; and(5) Costs of action. Counterclaim dismissed.