What is the extent of an airline carrier’s liability in the event of breach in its contract of carriage with a passenger? It depends. As there are many instances of possible breach, lifting case samples seems the best way to explain these. Below are a few of the latest jurisprudence on the matter.
When a contract of carriage arises
The general rule is that “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.”[1]
J.S. obtained an emergency U.S. visa to undergo surgery to donate his kidney to his ailing cousin already confined in a California hospital. J.S. purchased a round trip plane ticket from Japan Airlines (JAL). He was scheduled to leave for California via Narita, Japan. On the date of his flight, J.S. went to the airport and after his plane ticket, boarding pass, travel authority and personal articles were subjected to rigid immigration and security routines, he was allowed to board.
While inside the airplane, as JAL’s airline crew were unfamiliar with J.S.’s emergency U.S. visa, they accused him of carrying a falsified travel document and claimed he would not really go to the U.S. but actually intended to stay and work in Japan. They did these by shouting at, and, being arrogant towards, J.S. J.S. denied the claims and even pleaded to be closely monitored when the aircraft stops over in Narita. His pleas were ignored and, humiliated, he was forced to disembark. The plane left without him and his U.S. visa was later cancelled.
In granting moral and exemplary damages in favor of J.S., the Supreme Court held that (1) in “an action for breach of contract of carriage, all that is required of plaintiff is to prove the existence of such contract and its non-performance by the carrier through the latter’s failure to carry the passenger safely to his destination”; (2) under Art. 2220 of the Civil Code, moral damages may be awarded for “breaches of contract where the defendant acted fraudulently or in bad faith”; and (3) exemplary damages, which “are awarded by way of example or correction for the public good, may be recovered in contractual obligations if defendant acted in wanton, fraudulent, reckless, oppressive, or malevolent manner”.
J.S. had complete travel documents and in fact was already allowed to board and be seated. When JAL personnel summarily and insolently ordered him to disembark to again verify his travel documents and accused him of working in Japan on the pretext of going to the U.S. despite valid and verified travel documents, JAL breached the contract of carriage in bad faith justifying the grant of moral damages at P500,000,00.
In justifying exemplary damages at P100,000,00, the Court said - “Passengers have a right to be treated by the carrier’s employees with kindness, respect, courtesy and due consideration and are entitled to be protected against personal misconduct, injurious language, indignities and abuses from such employees.”
The Court also granted attorney’s fees at P200,000,00 noting that “they may be awarded when defendant’s act or omission has compelled plaintiff to litigate with third persons or to incur expenses to protect his interest” and that although such “amount is actually discretionary upon the Court … it may be recovered as actual or compensatory damages when exemplary damages are awarded and whenever the court deems it just and equitable.”
Lastly but equally important, the Court also held that “the power to admit or not an alien into the country is a sovereign act [in this case by the U.S.] which cannot be interfered with even by JAL.”[2]
Of course, the above rule, like all general rules, has exceptions and you can still be denied your flight even with a valid ticket, say, if you provide contributory fault or negligence, like joking about a bomb (Presidential Decree No. 1727 penalizes the “Making Of Any Threat Concerning Bombs, Explosives Or Any Similar Device Or Means Of Destruction” with a maximum of 5 years imprisonment)[3].
Civil Code vs. Treaty
No, not that the Civil Code trumps an international treaty (in this case, the Warsaw Convention of 1929 as amended by the Montreal Convention of 1999), only that there are claims recoverable under the Civil Code which are not covered by the treaty.
S.G. and his friends were to attend a golf tournament in Jakarta. They bought their tickets from Philippine Airlines (PAL) with the itinerary: Manila-Singapore-Jakarta-Singapore-Manila. PAL told them that its plane would take them from Manila to Singapore, while Singapore Airlines (SIA) would take them from Singapore to Jakarta. S.G. and co. took the PAL flight to Singapore. Upon arrival, they went to the SIA office to check-in for their next flight to Jakarta. However, SIA rejected their tickets explaining they were not endorsed by PAL and that if SIA honored the tickets without endorsement, PAL would not pay SIA for their passage. S.G. tried to contact PAL’s office at the airport but it was closed.
S.G. and co. were forced to purchase tickets from Garuda Airlines and boarded its last flight for Jakarta. When they arrived in Jakarta, their welcoming party had already left and they had to arrange for their hotel transportation at a very late hour. S.G. later became ill and was unable to participate in the tournament.
3 years later and unsuccessful with his demand letters to PAL and SIA, S.G. filed a Complaint for Damages for having been subjected to “humiliation, embarrassment, mental anguish, serious anxiety, fear and distress”. PAL filed a Motion to Dismiss since the case was filed beyond the 2-year limit under the Warsaw Convention. Article 19 of the Convention covers a carrier’s liability for damages due to delay in passenger transportation while Article 29 limits the right to damages to within 2 years from the date on which the carriage stopped.
In denying PAL’s Motion to Dismiss, the Court held that “the Warsaw Convention does not “exclusively regulate” the relationship between passenger and carrier on an international flight.” The Court cited United Airlines v. Uy (G.R. No. 127768 November 19, 1999) which distinguished between 1) damage to a passenger’s baggage and 2) his humiliation at the hands of an airline’s employees. There, the Court held that the first cause of action was covered by the Warsaw Convention which prescribes in 2 years, while the second was covered by the provisions of the Civil Code on torts, which prescribes in 4 years. And so the Court held that S.G’s Complaint for Damages was covered by the Civil Code and was not yet barred under its provisions.[4]
It remains to be seen whether S.G. will make any recovery, but his complaint was allowed to proceed notwithstanding the provisions of the convention.
One Trip, multiple legs
Which carrier is responsible when a passenger’s travel has several legs serviced by different airlines?
G.M. decided to visit his relatives in Bombay and bought a ticket from British Airways (BA) with the following itinerary: Manila-HK-Bombay-HK-Manila. Since BA had no direct flights from Manila to Bombay, G.M. had to take the Manila to Hongkong flight via PAL.
At the PAL counter, G.M. checked in 2 pieces of luggage. When G.M. arrived in Bombay, his luggage was missing and was told by BA that the same might have been diverted to London. After waiting for 1 week, G.M. filed a claim for his lost baggage. Back in the Philippines, G.M. filed a complaint for damages and attorney’s fees against BA prompting the latter to disclaim liability and file a third-party complaint against PAL.
Although the Court allowed BA’s third-party complaint against PAL for the latter’s negligence re G.M.s luggage, it upheld previous decisions stating that “carriage by plane although performed by successive carriers is regarded as a single operation and that the carrier issuing the passenger’s ticket is considered the principal party and the other carrier merely subcontractors or agent”. Since the G.M. petition was based on breach of contract of carriage, he could only sue BA alone, and not PAL, the latter not being a party to the contract. However, with BA’s third-party complaint, PAL is not relieved from any liability to BA due to its negligent act.[5]
We note that in granting G.M.’s claim for actual, moral and exemplary damages for the lost luggage beyond the limit provided by the Warsaw Convention, the Court found that during presentation of evidence at trial, BA failed to object to testimony and evidence presented by G.M. regarding his claims. The Court said that “it is a well-settled doctrine that where the proponent offers evidence deemed by … the adverse party to be inadmissible for any reason, the latter has the right to object. However, such right is a mere privilege which can be waived. Necessarily, the objection must be made at the earliest opportunity, lest silence when there is opportunity to speak may operate as a waiver of objections.” Due to BA’s silence at trial, the Court granted G.M. actual (P7,000.00), moral and exemplary damages (P50,000.00) and 20% of the total amount granted as attorney’s fees, on top of the $400.00 limit under the Warsaw Convention.
Who declines an upgrade?
A fool, you’d think; if it’s at all possible that someone would decline a godsend. Well, not only is it possible, it’s happened.
Spouses V are frequent flyers of Cathay Pacific (“Cathay”). They, together with their maid and 2 friends went to Hong Kong. On their flight back to Manila, they and their 2 friends were booked on the Business Class. But prior to departure, Sps. V were informed that they would be upgraded to First Class. Sps. V refused the upgrade, reasoning that it would not look nice for them as hosts to travel in First Class and their guests, in the Business Class; plus, they were going to discuss business matters during the flight. They asked that other passengers be instead transferred to First Class.
However, Cathay personnel insisted saying the Business Class was already overbooked and if Sps. V continued to refuse, they would not be allowed to take the flight. Sps. V had to agree. But upon their arrival, Sps. V demanded from Cathay that they be indemnified for the “humiliation and embarrassment” regarding the upgrade incident.
In upholding the spouses’ claim of breach of contract of carriage, the Supreme Court held that priority upgrading is a privilege which, like all privileges, can be waived. So when the spouses declined to accept the upgrade and Cathay still insisted on the same, Cathay breached its contract of carriage. However, the Court found that although Cathay may have exercised poor judgment, there was no evidence of bad faith nor fraud, neither in Cathay’s insistence on the upgrade nor in the act of overbooking (as the latter did not exceed 10% of seating capacity pursuant to law).
Thus, the Court denied the claim for moral and exemplary damages both of which required the existence of bad faith or fraud. Attorney’s fees in favor of the spouses were also denied. But the Court granted nominal damages at P5,000.00 pursuant to Article 2221 of the Civil Code which provides: “Nominal damages are adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him”.[6] At P5,000.00, the Court obviously thought the upgrade was not much of a damage.
Lost luggage
We’ve discussed liability to a passenger beyond the Warsaw Convention. How about liability for lost luggage beyond the limits provided in the Warsaw Convention? In the case below, the luggage was returned to complainant but months after her scheduled conference for which the documents in her lost luggage were essential.
F.P. was an associate professor invited to take part in an international meeting in Italy to make a scientific presentation. She arrived in Italy via Alitalia but told there that her luggage was delayed and is in a succeeding flight. Her luggage included her scientific papers, slides and other research material. But the next flights did not have her luggage.
Despite her personal efforts to locate the luggage herself, the same could not be found and she returned to Manila without attending the meeting. Once back in Manila she demanded that Alitalia make reparation for the damages she suffered. The luggage was eventually returned to F.P. but 11 months later and 4 months after filing her case.
Although the Court found no bad faith or improper conduct on the part of Alitalia and no damage to the luggage occurred, it nevertheless found Alitalia to be in breach of contact and was 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 for any loss suffered”. Nominal damages were set at P40,000 and attorney’s fees at P5,000.00.[7]
Indemnity based on life expectancy
We’d rather not discuss the incident which can give rise to this issue but we also believe that it can be informative to discuss this topic.
Philippine Air Lines (PAL) Starlight Flight No. 26 left loilo for Manila. It did not reach its destination but crashed on Mt. Baco, Mindoro. Among the fatalities was N.P., 29 years old, single, a lawyer, President and General Manager of the Padilla Shipping Co., Inc. and Vice-President and Treasurer of the Allied Overseas Trading Co., Inc. The plane crashed in 1960.
In 1973, the trial court awarded damages in favor of N.P.’s sole heir, his mother, as follows: P477,000.00 as award for N.P.’s expected income; P10,000.00 as moral damages; P10,000.00 as attorney’s fees; with costs against PAL. In 1980, the Court of Appeals affirmed the trial court’s decision. On appeal to the Supreme Court, PAL claimed that damages, pursuant to U.S. jurisprudence, should be computed based on “the life expectancy of the deceased or of the beneficiary, whichever is shorter”. The Court held that even in the absence of law or jurisprudence, foreign jurisprudence is only persuasive.
And there are existing Civil Code provisions applicable in this case:
Art. 1764 provides that “Damages in cases comprised in this Section shall be awarded in accordance with Title XVIII of this Book, concerning Damages. Article 2206 shall also apply to the death of a passenger caused by the breach of contract by a common carrier.“
Art. 2206 provides that “[t]he amount of damages for death caused by a crime or quasi-delict shall be at least three thousand pesos [now 100,000.00], even though there may have been mitigating circumstances. In addition:
(1) The defendant shall be liable for the loss of the earning capacity of the deceased, and the indemnity shall be paid to the heirs of the latter; such indemnity shall in every case be assessed and awarded by the court, unless the deceased on account of permanent physical disability not caused by the defendant, had no earning capacity at the time of his death;…”Thus, the Court affirmed the trial court’s decision with a slight correction in the computation awarding P417,000 instead of P477,000. Fortunately too, the Court took note of the 16-year delay in the disposition of this case caused by PAL’s multiple appeals. N.P.’s mother had in fact died waiting for the final judgment. Accordingly, the Court awarded legal interest of 6% per annum from the date of the judgment on August 31, 1973, until it full payment. Costs against PAL.
Here’s to each of your travels being a bon voyage.
[1] Alitalia Airways vs. Court of Appeals, et al, G.R. No. 77011, July 24, 1990.
[2] Japan Airlines vs. Jesus Simangan, G.R. No. 170141, April 22, 2008.
[5] British Airways vs. Court Of Appeals, et al., G.R. No. 121824, January 29, 1998.
[7] Alitalia vs. Intermediate Appellate Court, et al., G.R. No. 71929. December 4, 1990.
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