Sunday, April 10, 2011

BAGMEN: Liability for Lost Luggage

By Obiter07

In Air France vs. Gillego, G.R. No 165266, December 15, 2010, the Supreme Court discussed the liability that airlines have for lost luggage, particularly in terms of moral damages due to a passenger.  Unfortunately for the airline, this was no ordinary passenger but a Congressman on his way to deliver a speech.

In 1993, Congressman Gillego was the keynote speaker at the 89th Inter-Parliamentary Conference Symposium on “Parliament: Guardian of Human Rights”.  The Congressman left for Paris and was to take a connecting flight to Budapest.  He learned of an earlier flight to Budapest and made arrangements for the same.  He was given a ticket and a boarding pass for this new flight as well as a new baggage claim stub for his checked-in luggage. 

Upon arrival at Budapest, his luggage was not at the claims section.  He sought assistance and was advised to wait at the hotel. His luggage was never delivered despite inquiries.   

Upon his return home, his lawyer wrote Air France complaining about the loss and the damages he suffered while in Budapest arising from his loss of personal effects, medicines and even the speeches he had prepared, among others.  He only had his travel documents, pocket money and the clothes on his back.  He was constrained to shop for personal items including clothes and medicines which amounted to $1,000. He even had to make another speech which was made more difficult due to the lack of data and information that was in his luggage. He asked for P1,000,000.00 from the petitioner as compensation. Air France ignored his repeated follow-ups on his lost luggage. He thereafter filed a complaint for damages against Air France.

The trial court awarded P1,000,000.00 as moral damages; P500,000.00 as exemplary damages and P50,000.00 as attorney’s fees to the plaintiff.   This was affirmed by the Court of Appeals.

Air France sought relief before the Supreme Court, arguing that the award of “extravagant sums to respondent that already tend to punish the petitioner and enrich the respondent, which is not the function at all of moral damages” and that “the damages awarded are definitely not proportionate or commensurate to the wrong or injury supposedly inflicted.” The plaintiff was after all an expert in the field of human rights who could have delivered his speech even without his notes. 

The petition was found to be partly meritorious.  The Supreme Court held that being a “business intended to serve the travelling public primarily, a contract of carriage is imbued with public interest.”  “Article 1735 of the Civil Code provides that in case of lost or damaged goods, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as required by Article 1733.  Thus, in an action based on a breach of contract of carriage, the aggrieved party does not have to prove that the common carrier was at fault or was negligent. All that he has to prove is the existence of the contract and the fact of its non-performance by the carrier.” [emphasis supplied]

There is no dispute that the checked-in luggage was not found upon arrival at plaintiff’s destination and was only returned two years later. The action is founded on the breach of the contract of carriage with Air France unable to offer any satisfactory explanation for the unreasonable delay in the delivery of the baggage. Since the presumption of negligence was not overcome, liability for the delay was established.  Upon recovery of the baggage during trial, the plaintiff no longer pressed his claim for actual or compensatory damages.

For moral damages to be awarded in the breach of contract of carriage, “the breach must be wanton and deliberately injurious or the one responsible acted fraudulently or with malice or bad faith.  Not every case of mental anguish, fright or serious anxiety calls for the award of moral damages.”  Where there is no showing of fraud or bad faith, “liability for damages is limited to the natural and probable consequences of the breach of the obligation which the parties had foreseen or could have reasonably foreseen. In such a case the liability does not include moral and exemplary damages.”
Air France was found liable for moral damages. Petitioner’s station manager testified that upon receiving the letter-complaint, she immediately began working on the Property Irregularity Report (PIR). This is issued at the airline station upon complaint by a passenger on missing baggage.  From the computer-printout, a PIR was initiated at the Budapest counter.  A search telex was sent out on three subsequent dates.  Based on the PIR printout, the plaintiff only gave his Philippine address and telephone number, and not the address and contact number of his Budapest hotel. The PIR usually is printed in two originals, one for the station manager and the other copy is for the passenger.  There was no record or entry in the PIR of any follow-up call made by the plaintiff in Budapest.  Plaintiff claimed that he was not given a copy of this PIR and that his repeated telephone calls were ignored.

It was found that Air France “acted in bad faith in repeatedly ignoring respondent’s follow-up calls.” The alleged entries in the PIR were not to be considered since these were not authenticated by the airline station representative in Budapest.  The Court did not accept as justification that plaintiff should be faulted in allegedly not giving his hotel address and phone number.  It found unbelievable that the plaintiff would not give his hotel and other information after he had promptly filed a complaint.  And even assuming that only the Philippine details were given, this does not explain why Air France never communicated with plaintiff concerning the lost baggage long after he had returned to the Philippines.  The missing luggage was returned only after the trial.

In addition, the PIR only establishes that telex searches were made but there is no attempt to explain the loss of the luggage.  Air France “did not give the attention and care due to its passenger whose baggage was not transported and delivered to him at his travel destination and scheduled time.  Inattention to and lack of care 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 an award of moral damages.”  Bad faith may be “in securing the contract and in the execution thereof, as well as in the enforcement of its terms, or any other kind of deceit.”  [emphasis supplied]

The failure to cite any act of discourtesy or rudeness does not make plaintiff’s “loss and moral suffering insignificant and less deserving of compensation.” “In repeatedly ignoring respondent’s inquiries, petitioner’s employees exhibited an indifferent attitude without due regard for the inconvenience and anxiety he experienced after realizing that his luggage was missing.  Petitioner was thus guilty of bad faith in breaching its contract of carriage with the respondent, which entitles the latter to the award of moral damages.” [emphasis supplied]

However, the sum of P1,000,000.00  is “excessive and not proportionate to the loss or suffering inflicted on the passenger under the circumstances.”  The Court cited Trans World Airlines v. Court of Appeals where it considered the social standing of the aggrieved passenger who was a lawyer and director of several companies but nonetheless reduced the award of moral damages.

Moral damages are awarded “to enable the injured party to obtain means, diversion or amusement that will serve to alleviate the moral suffering he has undergone by reason of defendant's culpable action.” Exemplary damages are to “deter serious wrongdoings.” Under Article 2216 of the Civil Code, the assessment of damages is left to the discretion of the court according to the circumstances of each case. This is “limited by the principle that the amount awarded should not be palpably excessive as to indicate that it was the result of prejudice or corruption on the part of the trial court.  Simply put, the amount of damages must be fair, reasonable and proportionate to the injury suffered.”

Since Air France “failed to act timely on the passenger’s predicament caused by its employees’ mistake and more than ordinary inadvertence or inattention, and the passenger failed to show any act of arrogance, discourtesy or rudeness committed by the air carrier’s employees, the amounts of P200,000.00, P50,000.00 and P30,000.00 as moral damages, exemplary damages and attorney’s fees  would be sufficient and justified."

It is ironic that the award of damages, just like the luggage, comes too late since the plaintiff has already passed away.  Justice, just like baggage, can be just as delayed.


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