CASE DIGEST (Transportation Law): PAL. vs. C.A.

Philippine Air Lines vs. Court of Appeals

GR 120262, 17 July 1997)

FACTS:

On 23 October 1988, Leovigildo A. Pantejo, then City Fiscal of Surigao City, boarded a PAL plane in Manila and disembarked in Cebu City where he was supposed to take his connecting flight to Surigao City. However, due to typhoon Osang, the connecting flight to Surigao City was cancelled. To accommodate the needs of its stranded passengers, PAL initially gave out cash assistance of P 100.00 and, the next day, P200.00, for their expected stay of 2 days in Cebu. Pantejo requested instead that he be billeted in a hotel at the PAL’s expense because he did not have cash with him at that time, but PAL refused. Thus, Pantejo was forced to seek and accept the generosity of a co-passenger, an engineer named Andoni Dumlao, and he shared a room with the latter at Sky View Hotel with the promise to pay his share of the expenses upon reaching Surigao. On 25 October 1988 when the flight for Surigao was resumed, Pantejo came to know that the hotel expenses of his co-passengers, one Superintendent Ernesto Gonzales and a certain Mrs. Gloria Rocha, an Auditor of the Philippine National Bank, were reimbursed by PAL. At this point, Pantejo informed Oscar Jereza, PAL’s Manager for Departure Services at Mactan Airport and who was in charge of cancelled flights, that he was going to sue the airline for discriminating against him. It was only then that Jereza offered to pay Pantejo P300.00 which, due to the ordeal and anguish he had undergone, the latter declined.

Pantejo filed a suit for damages against PAL with the RTC of Surigao City which, after trial, rendered judgment, ordering PAL to pay Pantejo P300.00 for actual damages, P150,000.00 as moral damages, P100,000.00 as exemplary damages, P15,000.00 as attorney’s fees, and 6% interest from the time of the filing of the complaint until said amounts shall have been fully paid, plus costs of suit.

On appeal, the appellate court affirmed the decision of the court a quo, but with the exclusion of the award of attorney’s fees and litigation expenses.

The Supreme Court affirmed the challenged judgment of Court of Appeals, subject to the modification regarding the computation of the 6% legal rate of interest on the monetary awards granted therein to Pantejo.

ISSUE:

Whether petitioner airlines acted in bad faith when it failed and refused to provide hotel accommodations for respondent Pantejo or to reimburse him for hotel expenses incurred by reason of the cancellation of its connecting flight to Surigao City due to force majeur.

HELD:
A contract to transport passengers is quite different in kind and degree from any other contractual relation, and this is because of the relation which an air carrier sustains with the public. Its business is mainly with the travelling public. It invites people to avail of the comforts and advantages it offers. The contract of air carriage, therefore, generates a relation attended with a public duty. Neglect or malfeasance of the carrier’s employees naturally could give ground for an action for damages.

The discriminatory act of PAL against Pantejo ineludibly makes the former liable for moral damages under Article 21 in relation to Article 2219 (10) of the Civil Code. As held in Alitalia Airways vs. CA, et al., such inattention to and lack of care by the airline for the interest of its passengers who are entitled to its utmost consideration, particularly as to their convenience, amount to bad faith which entitles the passenger to the award of moral damages.

Moral damages are emphatically not intended to enrich a plaintiff at the expense of the defendant. They are awarded only to allow the former to obtain means, diversion, or amusements that will serve to alleviate the moral suffering he has undergone due to the defendant’s culpable action and must, perforce, be proportional to the suffering inflicted. However, substantial damages do not translate into excessive damages. Herein, except for attorney’s fees and costs of suit, it will be noted that the Courts of Appeals affirmed point by point the factual findings of the lower court upon which the award of damages had been based.

The interest of 6% imposed by the court should be computed from the date of rendition of judgment and not from the filing of the complaint.

The rule has been laid down in Eastern Shipping Lines, Inc. vs. Court of Appeals, et. al. that “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 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages except when or until the demand can be established with reasonable certainty. Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be so reasonably established at the time the demand is made, the interest shall begin to run only from the date the judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably ascertained). The actual base for the computation of legal interest shall, in any case, be on the amount finally adjudged.” This is because at the time of the filling of the complaint, the amount of the damages to which Pantejo may be entitled remains unliquidated and not known, until it is definitely ascertained, assessed and determined by the court, and only after the presentation of proof thereon.