epublic of the PhilippinesSUPREME COURTManilaSECOND DIVISIONG.R. No. 171092 March 15, 2010EDNA DIAGO LHUILLIER, Petitioner, vs.BRITISH AIRA!S, Respondent.D E C I S I O NDEL CASTILLO, J.:urisdictio est potestas de publico introducta cu! necessitate "uris dicendi. urisdiction is a po#er introduced for the public $ood, on account of the necessit% of dispensin$ "ustice.& Factual AntecedentsOn 'pril (), (**+, petitioner Edna Dia$o ,huillier filed a Co!plaint( for da!a$es a$ainst respondent -ritish 'ir#a%s before the Re$ional .rial Court /R.C0 of Ma1ati Cit%. She alle$ed that on 2ebruar% (), (**+, she too1 respondent3s fli$ht +4) fro! ,ondon, 5nited 6in$do! to Ro!e, Ital%. Once on board, she alle$edl% re7uested ulian 8allida% /8allida%0, one of the respondent3s fli$ht attendants, to assist her in placin$ her hand9carried lu$$a$e in the overhead bin. 8o#ever, 8allida% alle$edl% refused to help and assist her, and even sarcasticall% re!ar1ed that :If I #ere to help all ;** passen$ers in this fli$ht, I #ould have a bro1en bac1chan$e Co!!ission, she found out that the resident a$ent of respondent in the Philippines is 'lonEo F. 'ncheta. Subse7uentl%, on Septe!ber G, (**+, petitioner filed a Motion to Resolve Pendin$ Incident and Opposition to Motion to Dis!iss.G Rulin$ of the Re$ional .rial CourtOn October &4, (**+, the R.C of Ma1ati Cit%, -ranch &;(, issued an Order&* $rantin$ respondent3s Motion to Dis!iss. It ruled thatA.he Court s%!pathiEes #ith the alle$ed ill9treat!ent suffered b% the plaintiff. 8o#ever, our Courts have to appl% the principles of international la#, and are bound b% treat% stipulations entered into b% the Philippines #hich for! part of the la# of the land. One of this is the =arsa# Convention. -ein$ a si$nator% thereto, the Philippines adheres to its stipulations and is bound b% its provisions includin$ the place #here actions involvin$ da!a$es to plaintiff is to be instituted, as provided for under 'rticle ()/&0 thereof. .he Court finds no "ustifiable reason to deviate fro! the indicated li!itations as it #ill onl% run counter to the provisions of the =arsa# Convention. Said adherence is in consonance #ith the co!it% of nations and deviation fro! it can onl% be effected throu$h proper denunciation as enunciated in the Santos case /ibid0. Since the Philippines is not the place of do!icile of the defendant nor is it the principal place of business, our courts are thus divested of "urisdiction over cases for da!a$es. Neither #as plaintiff3s tic1et issued in this countr% nor #as her destination Manila but Ro!e in Ital%. It bears stressin$ ho#ever, that referral to the court of proper "urisdiction does not constitute constructive denial ofplaintiff3s ri$ht to have access to our courts since the =arsa# Convention itself provided for "urisdiction over cases arisin$ fro! international transportation. Said treat% stipulations !ust be co!plied #ith in $ood faith follo#in$ the ti!e honored principle of pacta sunt servanda. .he resolution of the propriet% of service of su!!ons is rendered !oot b% the Court3s #ant of "urisdiction over the instant case.=8ERE2ORE, pre!ises considered, the present Motion to Dis!iss is hereb% @R'N.ED and this case is hereb% ordered DISMISSED.Petitioner filed a Motion for Reconsideration but the !otion #as denied in an Order&& dated anuar% 4, (**?.Petitioner no# co!es directl% before us on a Petition for Revie# on Certiorari on pure 7uestionsof la#, raisin$ the follo#in$ issuesAIssuesI. =8E.8ER H H H P8I,IPPINE CO5R.s 8'VE 5RISDIC.ION OVER ' .OR.IO5S COND5C. COMMI..ED '@'INS. ' 2I,IPINO CI.IIEN 'ND RESIDEN. -J 'IR,INE PERSONNE, O2 ' 2OREI@N C'RRIER .R'VE,,IN@ -EJOND .8E .ERRI.ORI', ,IMI. O2 'NJ 2OREI@N CO5N.RJB 'ND .85S IS O5.SIDE .8E 'M-I. O2 .8E ='RS'= CONVEN.ION.II. =8E.8ER > > > RESPONDEN. 'IR C'RRIER O2 P'SSEN@ERS, IN 2I,IN@ I.S MO.ION .O DISMISS -'SED ON ,'C6 O2 5RISDIC.ION OVER .8E S5-EC. M'..ER O2 .8E C'SE 'ND OVER I.S PERSON M'J -E DEEMED 'S 8'VIN@ IN 2'C. 'ND IN ,'= S5-MI..ED I.SE,2 .O .8E 5RISDIC.ION O2 .8E ,O=ER CO5R., ESPECI',,J SO, =8EN .8E VERJ ,'=JER 'R@5IN@ 2OR I. IS 8IMSE,2 .8E RESIDEN. '@EN. O2 .8E C'RRIER.Petitioner3s 'r$u!entsPetitioner ar$ues that her cause of action arose not fro! the contract of carria$e, but fro! the tortious conduct co!!itted b% airline personnel of respondent in violation of the provisions of the Civil Code on 8u!an Relations. Since her cause of action #as not predicated on the contract of carria$e, petitioner asserts that she has the option to pursue this case in this "urisdiction pursuant to Philippine la#s. Respondent3s 'r$u!entsIn contrast, respondent !aintains that petitioner3s clai! for da!a$es fell #ithin the a!bit of 'rticle ()/&0 of the =arsa# Convention. 's such, the sa!e can onl% be filed before the courts of ,ondon, 5nited 6in$do! or Ro!e, Ital%.O"r R"#$%& .he petition is #ithout !erit. .he =arsa# Convention has the force and effect of la# in this countr%.It is settled that the =arsa# Convention has the force and effect of la# in this countr%. In Santos III v. Northwest Orient Airlines,&( #e held thatA.he Republic of the Philippines is a part% to the Convention for the 5nification of Certain Rules Relatin$ to International .ransportation b% 'ir, other#ise 1no#n as the =arsa# Convention. It too1 effect on 2ebruar% &;, &G;;. .he Convention #as concurred in b% the Senate, throu$h its Resolution No. &G, on Ma% &?, &G+*. .he Philippine instru!ent of accession #as si$ned b% President Elpidio Fuirino on October &;, &G+*, and #as deposited #ith the Polish $overn!ent on Nove!ber G, &G+*. .he Convention beca!e applicable to the Philippines on 2ebruar% G, &G+&. On Septe!ber (;, &G++, President Ra!on Ma$sa%sa% issued Procla!ation No. (*&, declarin$ our for!al adherence thereto, :to the end that the sa!e and ever% article and clause thereof !a% be observed and fulfilled in $ood faith b% the Republic of the Philippines and the citiEens thereof.:.he Convention is thus a treat% co!!it!ent voluntaril% assu!ed b% the Philippine $overn!ent and, as such, has the force and effect of la# in this countr%.&;.he =arsa# Convention applies because the air travel, #here the alle$ed tortious conduct occurred, #as bet#een the 5nited 6in$do! and Ital%, #hich are both si$natories to the =arsa# Convention. 'rticle & of the =arsa# Convention providesA&. .his Convention applies to all international carria$e of persons, lu$$a$e or $oods perfor!ed b% aircraft for re#ard. It applies e7uall% to $ratuitous carria$e b% aircraft perfor!ed b% an air transport underta1in$.(. 2or the purposes of this Convention the e>pression :international carria$e: !eans an% carria$e in #hich, accordin$ to the contract !ade b% the parties, the place of departure and the place of destination, #hether or not there be a brea1 in the carria$e or a tranship!ent, are situated either #ithin the territories of t#o 8i$h Contractin$ Parties, or #ithin the territor% of a sin$le 8i$h Contractin$ Part%, if there is an a$reed stoppin$ place#ithin a territor% sub"ect to the soverei$nt%, suEeraint%, !andate or authorit% of another Po#er, even thou$h that Po#er is not a part% to this Convention. ' carria$e #ithout such an a$reed stoppin$ place bet#een territories sub"ect to the soverei$nt%, suEeraint%, !andate or authorit% of the sa!e 8i$h Contractin$ Part% is not dee!ed to be international for the purposes of this Convention. /E!phasis supplied0 .hus, #hen the place of departure and the place of destination in a contract of carria$e are situated #ithin the territories of t#o 8i$h Contractin$ Parties, said carria$e is dee!ed an :international carria$e:. .he 8i$h Contractin$ Parties referred to herein #ere the si$natories to the =arsa# Convention and those #hich subse7uentl% adhered to it.&4In the case at bench, petitioner3s place of departure #as ,ondon, 5nited 6in$do! #hile her place of destination #as Ro!e, Ital%.&+ -oth the 5nited 6in$do!&? and Ital%&D si$ned and ratified the =arsa# Convention. 's such, the transport of the petitioner is dee!ed to be an :internationalcarria$e: #ithin the conte!plation of the =arsa# Convention. Since the =arsa# Convention applies in the instant case, then the "urisdiction over the sub"ect !atter of the action is $overned b% the provisions of the =arsa# Convention.5nder 'rticle ()/&0 of the =arsa# Convention, the plaintiff !a% brin$ the action for da!a$es before K &. the court #here the carrier is do!iciledB (. the court #here the carrier has its principal place of businessB;. the court #here the carrier has an establish!ent b% #hich the contract has been !adeB or4. the court of the place of destination.In this case, it is not disputed that respondent is a -ritish corporation do!iciled in ,ondon, 5nited 6in$do! #ith ,ondon as its principal place of business. 8ence, under the first and second "urisdictional rules, the petitioner !a% brin$ her case before the courts of ,ondon in the 5nited 6in$do!. In the passen$er tic1et and ba$$a$e chec1 presented b% both the petitioner and respondent, it appears that the tic1et #as issued in Ro!e, Ital%. Conse7uentl%, under the third "urisdictional rule, the petitioner has the option to brin$ her case before the courts of Ro!e in Ital%. 2inall%, both the petitioner and respondent aver that the place of destination is Ro!e, Ital%, #hich is properl% desi$nated $iven the routin$ presented in the said passen$er tic1et and ba$$a$echec1. 'ccordin$l%, petitioner !a% brin$ her action before the courts of Ro!e, Ital%. =e thus find that the R.C of Ma1ati correctl% ruled that it does not have "urisdiction over the case filed b% the petitioner.Santos III v. North#est Orient 'irlines&) applies in this case. Petitioner contends that Santos III v. North#est Orient 'irlines&G cited b% the trial court is inapplicable to the present controvers% since the facts thereof are not si!ilar #ith the instant case.=e are not persuaded. In Santos III v. North#est Orient 'irlines,(* 'u$usto Santos III, a resident of the Philippines, purchased a tic1et fro! North#est Orient 'irlines in San 2rancisco, for transport bet#een San 2rancisco and Manila via .o1%o and bac1 to San 2rancisco. 8e #as #ait9listed in the .o1%o to Manila se$!ent of his tic1et, despite his prior reservation. Contendin$ that North#est Orient 'irlines acted in bad faith and discri!inated a$ainst hi! #hen it canceled his confir!ed reservation and $ave his seat to so!eone #ho had no better ri$ht to it, 'u$usto Santos III sued the carrier for da!a$es before the R.C. North#est Orient 'irlines !oved to dis!iss the co!plaint on $round of lac1 of "urisdiction citin$ 'rticle ()/&0 of the =arsa# Convention. .he trial court $ranted the !otion #hich rulin$ #as affir!ed b% the Court of 'ppeals. =hen the case #as brou$ht before us, #e denied the petition holdin$ that under 'rticle ()/&0 of the =arsa# Convention, 'u$usto Santos III !ust prosecute his clai! in the 5nited States, that place bein$ the /&0 do!icile of the North#est Orient 'irlinesB /(0 principal office of the carrierB /;0 place #here contract had been !ade /San 2rancisco0B and /40 place of destination /San 2rancisco0.(& =e further held that 'rticle ()/&0 of the =arsa# Convention is "urisdictional in character. .husA' nu!ber of reasons tends to support the characteriEation of 'rticle ()/&0 as a "urisdiction and not a venue provision. 2irst, the #ordin$ of 'rticle ;(, #hich indicates the places #here the action for da!a$es :!ust: be brou$ht, underscores the !andator% nature of 'rticle ()/&0. Second, this characteriEation is consistent #ith one of the ob"ectives of the Convention, #hich is to :re$ulate in a unifor! !anner the conditions of international transportation b% air.: .hird, the Convention does not contain an% provision prescribin$ rules of "urisdiction other than 'rticle ()/&0, #hich !eans that the phrase :rules as to "urisdiction: used in 'rticle ;( !ust refer onl% to 'rticle ()/&0. In fact, the last sentence of 'rticle ;( specificall% deals #ith the e>clusive enu!eration in 'rticle ()/&0 as :"urisdictions,: #hich, as such, cannot be left to the #ill of the parties re$ardless of the ti!e #hen the da!a$e occurred.> > > >In other #ords, #here the !atter is $overned b% the =arsa# Convention, "urisdiction ta1es on a dual concept. urisdiction in the international sense !ust be established in accordance #ith 'rticle ()/&0 of the =arsa# Convention, follo#in$ #hich the "urisdiction of a particular court !ust be established pursuant to the applicable do!estic la#. Onl% after the 7uestion of #hich court has "urisdiction is deter!ined #ill the issue of venue be ta1en up. .his second 7uestion shall be $overned b% the la# of the court to #hich the case is sub!itted.((Contrar% to the contention of petitioner, Santos III v. North#est Orient 'irlines(; is analo$ous to the instant case because /&0 the do!icile of respondent is ,ondon, 5nited 6in$do!B(4 /(0 the principal office of respondent airline is li1e#ise in ,ondon, 5nited 6in$do!B(+ /;0 the tic1et #aspurchased in Ro!e, Ital%B(? and /40 the place of destination is Ro!e, Ital%.(D In addition, petitioner based her co!plaint on 'rticle (&D?() of the Civil Code on quasi-delict and 'rticles &G(G and (&;* of the Civil Code on 8u!an Relations. In Santos III v. North#est Orient 'irlines,;& 'u$usto Santos III si!ilarl% posited that 'rticle () /&0 of the =arsa# Convention did not appl% if the action is based on tort. 8ence, contrar% to the contention of the petitioner, the factual settin$ of Santos III v. North#est Orient 'irlines;( and the instant case are parallel on the !aterial points. .ortious conduct as $round for the petitioner3s co!plaint is #ithin the purvie# of the =arsa# Convention.Petitioner contends that in Santos III v. North#est Orient 'irlines,;; the cause of action #as based on a breach of contract #hile her cause of action arose fro! the tortious conduct of the airline personnel and violation of the Civil Code provisions on 8u!an Relations.;4 In addition, she clai!s that our pronounce!ent in Santos III v. North#est Orient 'irlines;+ that :the alle$ation of #illful !isconduct resultin$ in a tort is insufficient to e>clude the case fro! the co!prehension of the =arsa# Convention,: is !ore of an obiter dictu! rather than the ratio decidendi.;? She !aintains that the fact that said acts occurred aboard a plane is !erel% incidental, if not irrelevant.;D=e disa$ree #ith the position ta1en b% the petitioner. -lac1 defines obiter dictum as :an opinion entirel% unnecessar% for the decision of the case: and thus :are not bindin$ as precedent.:;) In Santos III v. North#est Orient 'irlines,;G 'u$usto Santos III cate$oricall% put in issue the applicabilit% of 'rticle ()/&0 of the =arsa# Convention if the action is based on tort. In the said case, #e held that the alle$ation of #illful !isconduct resultin$ in a tort is insufficientto e>clude the case fro! the real! of the =arsa# Convention. In fact, our rulin$ that a cause of action based on tort did not brin$ the case outside the sphere of the =arsa# Convention #as our ratio decidendi in disposin$ of the specific issue presented b% 'u$usto Santos III. Clearl%, the contention of the herein petitioner that the said rulin$ is an obiter dictu! is #ithout basis.Relevant to this particular issue is the case of Care% v. 5nited 'irlines,4* #here the passen$er filed an action a$ainst the airline arisin$ fro! an incident involvin$ the for!er and the airline3s fli$ht attendant durin$ an international fli$ht resultin$ to a heated e>chan$e #hich included insults and profanit%. .he 5nited States Court of 'ppeals /Gth Circuit0 held that the :passen$erLs action a$ainst the airline carrier arisin$ fro! alle$ed confrontational incident bet#een passen$er and fli$ht attendant on international fli$ht #as $overned e>clusivel% b% the =arsa# Convention, even thou$h the incident alle$edl% involved intentional !isconduct b% the fli$ht attendant.:4& In -loo! v. 'las1a 'irlines,4( the passen$er brou$ht nine causes of action a$ainst the airline in the state court, arisin$ fro! a confrontation #ith the fli$ht attendant durin$ an international fli$htto Me>ico. .he 5nited States Court of 'ppeals /Gth Circuit0 held that the :=arsa# Convention $overns actions arisin$ fro! international air travel and provides the e>clusive re!ed% for conduct #hich falls #ithin its provisions.: It further held that the said Convention :created no e>ception for an in"ur% suffered as a result of intentional conduct: 4; #hich in that case involved a clai! for intentional infliction of e!otional distress.It is thus settled that alle$ations of tortious conduct co!!itted a$ainst an airline passen$er durin$ the course of the international carria$e do not brin$ the case outside the a!bit of the =arsa# Convention. Respondent, in see1in$ re!edies fro! the trial court throu$h special appearance of counsel, is not dee!ed to have voluntaril% sub!itted itself to the "urisdiction of the trial court.Petitioner ar$ues that respondent has effectivel% sub!itted itself to the "urisdiction of the trial court #hen the latter stated in its Co!!entCOpposition to the Motion for Reconsideration that :Defendant Mis at a lossN > > > ho# the plaintiff arrived at her erroneous i!pression that it isC#as Euro9Philippines 'irlines Services, Inc. that has been !a1in$ a special appearance since > > > -ritish 'ir#a%s > > > has been clearl% specif%in$ in all the pleadin$s that it has filed #ith this 8onorable Court that it is the one !a1in$ a special appearance.:44In refutin$ the contention of petitioner, respondent cited ,a Naval Dru$ Corporation v. Court of 'ppeals4+ #here #e held that even if a part% :challen$es the "urisdiction of the court over his person, as b% reason of absence or defective service of su!!ons, and he also invo1es other $rounds for the dis!issal of the action under Rule &?, he is not dee!ed to be in estoppel or to have #aived his ob"ection to the "urisdiction over his person.:4? .his issue has been s7uarel% passed upon in the recent case of @arcia v. Sandi$anba%an,4D #here #e reiterated our rulin$ in ,a Naval Dru$ Corporation v. Court of 'ppeals4) and elucidated thusASpecial 'ppearance to Fuestion a Court3s urisdiction Is NotVoluntar% 'ppearance.he second sentence of Sec. (*, Rule &4 of the Revised Rules of Civil Procedure clearl% providesASec. (*. Voluntar% appearance. K .he defendant3s voluntar% appearance in the action shall be e7uivalent to service of su!!ons. .he inclusion in a !otion to dis!iss of other $rounds aside fro! lac1 of "urisdiction over the person of the defendant shall not be dee!ed a voluntar% appearance. .hus, a defendant #ho files a !otion to dis!iss, assailin$ the "urisdiction of the court over his person, to$ether #ith other $rounds raised therein, is not dee!ed to have appeared voluntaril% before the court. =hat the rule on voluntar% appearance K the first sentence of the above97uoted rule K !eans is that the voluntar% appearance of the defendant in court is #ithout 7ualification, in#hich case he is dee!ed to have #aived his defense of lac1 of "urisdiction over his person due toi!proper service of su!!ons. .he pleadin$s filed b% petitioner in the sub"ect forfeiture cases, ho#ever, do not sho# that she voluntaril% appeared #ithout 7ualification. Petitioner filed the follo#in$ pleadin$s in 2orfeiture IA /a0 !otion to dis!issB /b0 !otion for reconsideration andCor to ad!it ans#erB /c0 second !otion for reconsiderationB /d0 !otion to consolidate forfeiture case #ith plunder caseB and /e0 !otion to dis!iss andCor to 7uash 2orfeiture I. 'nd in 2orfeiture IIA /a0 !otion to dis!iss andCor to 7uash 2orfeiture IIB and /b0 !otion for partial reconsideration..he fore$oin$ pleadin$s, particularl% the !otions to dis!iss, #ere filed b% petitioner solel% for special appearance #ith the purpose of challen$in$ the "urisdiction of the S- over her person andthat of her three children. Petitioner asserts therein that S- did not ac7uire "urisdiction over her person and of her three children for lac1 of valid service of su!!ons throu$h i!provident substituted service of su!!ons in both 2orfeiture I and 2orfeiture II. .his stance the petitioner never abandoned #hen she filed her !otions for reconsideration, even #ith a pra%er to ad!it their attached 'ns#er E> 'bundante 'd Cautela! dated anuar% ((, (**+ settin$ forth affir!ative defenses #ith a clai! for da!a$es. 'nd the other subse7uent pleadin$s, li1e#ise, didnot abandon her stance and defense of lac1 of "urisdiction due to i!proper substituted services ofsu!!ons in the forfeiture cases. Evidentl%, fro! the fore$oin$ Sec. (*, Rule &4 of the &GGD Revised Rules on Civil Procedure, petitioner and her sons did not voluntaril% appear before the S- constitutive of or e7uivalent to service of su!!ons.Moreover, the leadin$ ,a Naval Dru$ Corp. v. Court of 'ppeals applies to the instant case. Said case elucidates the current vie# in our "urisdiction that a special appearance before the courtKKchallen$in$ its "urisdiction over the person throu$h a !otion to dis!iss even if the !ovant invo1es other $roundsKKis not tanta!ount to estoppel or a #aiver b% the !ovant of his ob"ection to "urisdiction over his personB and such is not constitutive of a voluntar% sub!ission to the "urisdiction of the court.1avvphi1.hus, it cannot be said that petitioner and her three children voluntaril% appeared before the S- to cure the defective substituted services of su!!ons. .he% are, therefore, not estopped fro! 7uestionin$ the "urisdiction of the S- over their persons nor are the% dee!ed to have #aived such defense of lac1 of "urisdiction. Conse7uentl%, there bein$ no valid substituted services of su!!ons !ade, the S- did not ac7uire "urisdiction over the persons of petitioner and her children. 'nd perforce, the proceedin$s in the sub"ect forfeiture cases, insofar as petitioner and her three children are concerned, are null and void for lac1 of "urisdiction. /E!phasis supplied0In this case, the special appearance of the counsel of respondent in filin$ the Motion to Dis!iss and other pleadin$s before the trial court cannot be dee!ed to be voluntar% sub!ission to the "urisdiction of the said trial court. =e hence disa$ree #ith the contention of the petitioner and rule that there #as no voluntar% appearance before the trial court that could constitute estoppel ora #aiver of respondent3s ob"ection to "urisdiction over its person.=8ERE2ORE, the petition is DENIED. .he October &4, (**+ Order of the Re$ional .rial Courtof Ma1ati Cit%, -ranch &;(, dis!issin$ the co!plaint for lac1 of "urisdiction, is '22IRMED. SO ORDERED. Republic of the PhilippinesSUPREME COURTManila.8IRD DIVISIONG.R. No. 1'95'7 ("#) ', 200*PHILIPPINE AIRLINES, INC., petitioner, vs.HON. ADRIANO SA+ILLO, Pr,-$.$%& (".&, o/ RTC Bra%ch 00 , I#o$#o C$1), a%. SIMPLICIO GRI2O, respondents.D E C I S I O NCHICO3NA4ARIO, J.5.his is a Petition for Revie# on Certiorari under Rule 4+ of the Rules of Court, assailin$ the Decision& dated &D 'u$ust (**&, rendered b% the Court of 'ppeals in C'9@.R. SP No. 4)??4, affir!in$ in toto the Order( dated G une &GG), of -ranch ;* of the Re$ional .rial Court /R.C0 of Iloilo Cit%, dis!issin$ the Motion to Dis!iss filed b% petitioner Philippine 'irlines Inc. /P',0in the case entitled, Simplicio Grio v. hilippine Airlines! Inc. and Sin"apore Airlines, doc1eted as Civil Case No. (;DD;. P', is a corporation dul% or$aniEed under Philippine la#, en$a$ed in the business of providin$ air carria$e for passen$ers, ba$$a$e and car$o.; Public respondent 8on. 'driano Savillo is the presidin$ "ud$e of -ranch ;* of the Iloilo R.C, #here Civil Case No. (;DD; #as filedB #hile private respondent Si!plicio @riOo is the plaintiff in the afore!entioned case..he facts are undisputed.Private respondent #as invited to participate in the &GG; 'SE'N Seniors 'nnual @olf .ourna!ent held in a1arta, Indonesia. 8e and several co!panions decided to purchase their respective passen$er tic1ets fro! P', #ith the follo#in$ points of passa$eA M'NI,'9SIN@'PORE9'6'R.'9SIN@'PORE9M'NI,'. Private respondent and his co!panions #ere!ade to understand b% P', that its plane #ould ta1e the! fro! Manila to Sin$apore, #hile Sin$apore 'irlines #ould ta1e the! fro! Sin$apore to a1arta.4 On ; October &GG;, private respondent and his co!panions too1 the P', fli$ht to Sin$apore andarrived at about ?A** o3cloc1 in the evenin$. 5pon their arrival, the% proceeded to the Sin$apore 'irlines office to chec19in for their fli$ht to a1arta scheduled at )A** o3cloc1 in the sa!e evenin$. Sin$apore 'irlines re"ected the tic1ets of private respondent and his $roup because the% #ere not endorsed b% P',. It #as e>plained to private respondent and his $roup that if Sin$apore'irlines honored the tic1ets #ithout P',3s endorse!ent, P', #ould not pa% Sin$apore 'irlines for their passa$e. Private respondent tried to contact P',3s office at the airport, onl% to find out that it #as closed.+ Stranded at the airport in Sin$apore and left #ith no recourse, private respondent #as in panic and at a loss #here to $oB and #as sub"ected to hu!iliation, e!barrass!ent, !ental an$uish, serious an>iet%, fear and distress. Eventuall%, private respondent and his co!panions #ere forcedto purchase tic1ets fro! @aruda 'irlines and board its last fli$ht bound for a1arta. =hen the% arrived in a1arta at about &(A** o3cloc1 !idni$ht, the part% #ho #as supposed to fetch the! fro! the airport had alread% left and the% had to arran$e for their transportation to the hotel at a ver% late hour. 'fter the series of nerve9#rac1in$ e>periences, private respondent beca!e ill and #as unable to participate in the tourna!ent. ? 5pon his return to the Philippines, private respondent brou$ht the !atter to the attention of P',. 8e sent a de!and letter to P', on (* Dece!ber &GG; and another to Sin$apore 'irlines on (& March &GG4. 8o#ever, both airlines diso#ned liabilit% and bla!ed each other for the fiasco. On &+ 'u$ust &GGD, private respondent filed a Co!plaint for Da!a$es before the R.C doc1eted as Civil Case No. (;DD;, see1in$ co!pensation for !oral da!a$es in the a!ount of P&,***,***.** and attorne%3s fees.D Instead of filin$ an ans#er to private respondent3s Co!plaint, P', filed a Motion to Dis!iss) dated &) Septe!ber &GG) on the $round that the said co!plaint #as barred on the $round of prescription under Section &/f0 of Rule &? of the Rules of Court.G P', ar$ued that the =arsa# Convention,&* particularl% 'rticle (G thereof,&& $overned this case, as it provides that an% clai! for da!a$es in connection #ith the international transportation of persons is sub"ect to the prescription period of t#o %ears. Since the Co!plaint #as filed on &+ 'u$ust &GGD, !ore than three %ears after P', received the de!and letter on (+ anuar% &GG4, it #as alread% barred b% prescription.On G une &GG), the R.C issued an Order&( den%in$ the Motion to Dis!iss. It !aintained that theprovisions of the Civil Code and other pertinent la#s of the Philippines, not the =arsa# Convention, #ere applicable to the present case. .he Court of 'ppeals, in its assailed Decision dated &D 'u$ust (**&, li1e#ise dis!issed the Petition for Certiorari filed b% P', and affir!ed the G une &GG) Order of the R.C. It pronounced that the application of the =arsa# Convention !ust not be construed to preclude theapplication of the Civil Code and other pertinent la#s. -% appl%in$ 'rticle &&44 of the Civil Code,&; #hich allo#ed for a ten9%ear prescription period, the appellate court declared that the Co!plaint filed b% private respondent should not be dis!issed.&48ence, the present Petition, in #hich petitioner raises the follo#in$ issuesAI.8E CO5R. O2 'PPE',S ERRED IN NO. @IVIN@ D5E CO5RSE .O .8E PE.I.ION 'S RESPONDEN. 5D@E COMMI.ED @R'VE '-5SE O2 DISCRE.ION 'MO5N.IN@ .O ,'C6 O2 5RSIDIC.ION IN DENJIN@ P',3S MO.ION .O DISMISS.II.8E CO5R. O2 'PPE',S ERRED IN NO. 'PP,JIN@ .8E PROVISIONS O2 .8E ='RS'= CONVEN.ION DESPI.E .8E 2'C. .8'. @RIPO3S C'5SE O2 'C.ION 'ROSE 2ROM ' -RE'C8 O2 CON.R'C. 2OR IN.ERN'.ION', 'IR .R'NSPOR..III.8E CO5R. O2 'PPE',S ERRED IN NO. 8O,DIN@ .8'. .8E COMP,'IN. 2I,ED -J @RIPO -EJOND .8E .=O /(09JE'R PERIOD PROVIDED 5NDER .8E ='RS'= CONVEN.ION IS ',RE'DJ -'RRED -J PRESCRIP.ION.&+.he petition is #ithout !erit.In deter!inin$ #hether P',3s Motion to Dis!iss should have been $ranted b% the trial court, it !ust be ascertained if all the clai!s !ade b% the private respondent in his Co!plaint are coveredb% the =arsa# Convention, #hich effectivel% bars all clai!s !ade outside the t#o9%ear prescription period provided under 'rticle (G thereof. If the =arsa# Convention covers all of private respondent3s clai!s, then Civil Case No. (;DD; has alread% prescribed and should therefore be dis!issed. On the other hand, if so!e, if not all, of respondent3s clai!s are outside the covera$e of the =arsa# Convention, the R.C !a% still proceed to hear the case..he =arsa# Convention applies to :all international transportation of persons, ba$$a$e or $oods perfor!ed b% an% aircraft for hire.: It see1s to acco!!odate or balance the interests of passen$ers see1in$ recover% for personal in"uries and the interests of air carriers see1in$ to li!it potential liabilit%. It e!plo%s a sche!e of strict liabilit% favorin$ passen$ers and i!posin$ da!a$e caps to benefit air carriers.&? .he cardinal purpose of the =arsa# Convention is to provide unifor!it% of rules $overnin$ clai!s arisin$ fro! international air travelB thus, it precludes a passen$er fro! !aintainin$ an action for personal in"ur% da!a$es under local la# #hen his or her clai! does not satisf% the conditions of liabilit% under the Convention.&D'rticle &G of the =arsa# Convention provides for liabilit% on the part of a carrier for :da!a$es occasioned b% dela% in the transportation b% air of passen$ers, ba$$a$e or $oods.: 'rticle (4 e>cludes other re!edies b% further providin$ that :/&0 in the cases covered b% articles &) and &G, an% action for da!a$es, ho#ever founded, can onl% be brou$ht sub"ect to the conditions and li!its set out in this convention.: .herefore, a clai! covered b% the =arsa# Convention can no lon$er be recovered under local la#, if the statute of li!itations of t#o %ears has alread% lapsed.Nevertheless, this Court notes that "urisprudence in the Philippines and the 5nited States also reco$niEes that the =arsa# Convention does not :e>clusivel% re$ulate: the relationship bet#een passen$er and carrier on an international fli$ht. .his Court finds that the present case is substantiall% si!ilar to cases in #hich the da!a$es sou$ht #ere considered to be outside the covera$e of the =arsa# Convention.In #nited Airlines v. #$,&) this Court distin$uished bet#een the /&0 da!a$e to the passen$er3s ba$$a$e and /(0 hu!iliation he suffered at the hands of the airline3s e!plo%ees. .he first cause of action #as covered b% the =arsa# Convention #hich prescribes in t#o %ears, #hile the second #as covered b% the provisions of the Civil Code on torts, #hich prescribes in four %ears. Si!ilar distinctions #ere !ade in '!erican "urisprudence. In %ahane$ v. Air &rance,&G a passen$er #as denied access to an airline fli$ht bet#een Ne# Jor1 and Me>ico, despite the fact that she held a confir!ed reservation. .he court therein ruled that if the plaintiff #ere to clai! da!a$es based solel% on the dela% she e>perienced K for instance, the costs of rentin$ a van, #hich she had to arran$e on her o#n as a conse7uence of the dela% K the co!plaint #ould be barred b% the t#o9%ear statute of li!itations. 8o#ever, #here the plaintiff alle$ed that the airlines sub"ected her to un"ust discri!ination or undue or unreasonable preference or disadvanta$e, an act punishable under the 5nited States la#s, then the plaintiff !a% clai! purel% no!inal co!pensator% da!a$es for hu!iliation and hurt feelin$s, #hich are not provided for b% the =arsa# Convention. In another case, 'ol"el v. %e(icana Airlines,(* the court pronounced that actions for da!a$es for the :bu!pin$ off: itself, rather than the incidental da!a$es due to the dela%, fall outside the =arsa# Convention and do not prescribe in t#o %ears.In the Petition at bar, private respondent3s Co!plaint alle$ed that both P', and Sin$apore 'irlines #ere $uilt% of $ross ne$li$ence, #hich resulted in his bein$ sub"ected to :hu!iliation, e!barrass!ent, !ental an$uish, serious an>iet%, fear and distress.:(& .he e!otional har! suffered b% the private respondent as a result of havin$ been unreasonabl% and un"ustl% prevented fro! boardin$ the plane should be distin$uished fro! the actual da!a$es #hich resulted fro! the sa!e incident. 5nder the Civil Code provisions on tort,(( such e!otional har! $ives rise to co!pensation #here $ross ne$li$ence or !alice is proven. .he instant case is co!parable to the case of )athi"ra v. *ritish Airwa$s.(; In )athi"ra, it #as held that the airlines3 ne$li$ent act of reconfir!in$ the passen$er3s reservation da%s before departure and failin$ to infor! the latter that the fli$ht had alread% been discontinued is not a!on$ the acts covered b% the =arsa# Convention, since the alle$ed ne$li$ence did not occur durin$ the perfor!ance of the contract of carria$e but, rather, da%s before the scheduled fli$ht. In the case at hand, Sin$apore 'irlines barred private respondent fro! boardin$ the Sin$apore 'irlines fli$ht because P', alle$edl% failed to endorse the tic1ets of private respondent and his co!panions, despite P',3s assurances to respondent that Sin$apore 'irlines had alread% confir!ed their passa$e. =hile this fact still needs to be heard and established b% ade7uate proof before the R.C, an action based on these alle$ations #ill not fall under the =arsa# Convention, since the purported ne$li$ence on the part of P', did not occur durin$ the perfor!ance of the contract of carria$e but da%s before the scheduled fli$ht. .hus, the present action cannot be dis!issed based on the statute of li!itations provided under 'rticle (G of the =arsa# Convention.8ad the present case !erel% consisted of clai!s incidental to the airlines3 dela% in transportin$ their passen$ers, the private respondent3s Co!plaint #ould have been ti!e9barred under 'rticle (G of the =arsa# Convention. 8o#ever, the present case involves a special species of in"ur% resultin$ fro! the failure of P', andCor Sin$apore 'irlines to transport private respondent fro! Sin$apore to a1arta K the profound distress, fear, an>iet% and hu!iliation that private respondente>perienced #hen, despite P',3s earlier assurance that Sin$apore 'irlines confir!ed his passa$e,he #as prevented fro! boardin$ the plane and he faced the dauntin$ possibilit% that he #ould be stranded in Sin$apore 'irport because the P', office #as alread% closed. .hese clai!s are covered b% the Civil Code provisions on tort, and not #ithin the purvie# of the =arsa# Convention. 8ence, the applicable prescription period is that provided under 'rticle &&4? of the Civil CodeA'rt. &&4?. .he follo#in$ actions !ust be instituted #ithin four %earsA/&0 5pon an in"ur% to the ri$hts of the plaintiffB/(0 5pon a 7uasi9delict.Private respondent3s Co!plaint #as filed #ith the R.C on &+ 'u$ust &GGD, #hich #as less than four %ears since P', received his e>tra"udicial de!and on (+ anuar% &GG4. .hus, private respondent3s clai!s have not %et prescribed and P',3s Motion to Dis!iss !ust be denied.Moreover, should there be an% doubt as to the prescription of private respondent3s Co!plaint, the!ore prudent action is for the R.C to continue hearin$ the sa!e and den% the Motion to Dis!iss. =here it cannot be deter!ined #ith certaint% #hether the action has alread% prescribed or not, the defense of prescription cannot be sustained on a !ere !otion to dis!iss based on #hat appears to be on the face of the co!plaint.(4 'nd #here the $round on #hich prescription isbased does not appear to be indubitable, the court !a% do #ell to defer action on the !otion to dis!iss until after trial on the !erits.(+IN +IE O6 THE 6OREGOING, the instant Petition is DENIED. .he assailed Decision of the Court of 'ppeals in C'9@.R. SP No. 4)??4, pro!ul$ated on &D 'u$ust (**& is A66IRMED. Costs a$ainst the petitioner.SO ORDERED.+nares-Santia"o! Chairperson! Austria-%artine,! Nachura! -e$es! ...! concur.6oo1%o1,-& Penned b% 'ssociate ustice 'licia ,. Santos #ith 'ssociate ustices Ra!on '. -arcelona and Mercedes @oEo9Dadole, concurrin$. Rollo, pp. ;G94?.( Penned b% ud$e 'driano S. Savillo. C' rollo, pp. (G9;&.; C' rollo, p. ;;.4 Id. + Id. ? Id. at ;4.D Id. ) Id. at ;D94*.G Section &. @rounds. =ithin the ti!e for but before filin$ the ans#er to the co!plaint or pleadin$ assertin$ a clai!, a !otion to dis!iss !a% be !ade on an% of the follo#in$ $roundsA> > > >/f0 .hat the cause of action is barred b% a prior "ud$!ent or b% the Statute of ,i!itations.> > > >&* .he official title of the =arsa# Convention is :.he Convention for the 5nification of Certain Rules Relatin$ to International Carria$e b% 'ir,: &( October &G(G. In the case of the Philippines, the =arsa# Convention #as concurred in b% the Senate, throu$h Resolution No. &G, on &? Ma% &G+*. .he Philippine instru!ent of accession #as si$ned b% President Elpidio Fuirino on &; October &G+* and #as deposited #ith the Polish @overn!ent on G Nove!ber &G+*. .he Convention beca!e applicable to the Philippines on G 2ebruar% &G+&. On (; Septe!ber &G++, President Ra!on Ma$sa%sa% issued Procla!ation No. (*&, declarin$ the Philippines3 for!al adherence thereto, :to the end that the sa!e and ever% article and clause thereof !a% be observed and fulfilled in $ood faith b% the Republic of the Philippines and the citiEens thereof.: /Mapa v. Court of 'ppeals, ;4& Phil. ()&, (G+9(G? M&GGDN.0&& 'rticle (G. /&0 .he ri$ht to da!a$es shall be e>tin$uished if an action is not brou$ht #ithin t#o %ears, rec1oned fro! the date of arrival at the destination, or fro! the date on #hich the aircraft ou$ht to have arrived, or fro! the date on #hich the carria$e stopped./(0 .he !ethod of calculatin$ the period of li!itation shall be deter!ined b% the la# of the court to #hich the case is sub!itted.&( C' rollo, pp. (G9;&. &; .he follo#in$ actions !ust be brou$ht #ithin ten %ears fro! the ti!e the ri$ht of action accruesA/&0 5pon a #ritten contractB/(05pon an obli$ation created b% la#B/;0 5pon a "ud$!ent.&4 Rollo, pp. &49&D.&+ Id. at (+.&? Pennin$ton v. -ritish 'ir#a%s, (D+ 2.Supp. (d ?*&, && ul% (**;.&D Robertson v. '!erican 'irlines, (DD 2.Supp. (d G&, &) 'u$ust (**;.&) ;D? Phil. ?)) /&GGG0.&G 4D4 2. Supp. +;(, () une &GDG.(* )(& 2. (d 44(, &( une &G)D.(& C' rollo, p. ;4.(( 'rt (&D?. =hoever b% act or o!ission causes da!a$e to another, there bein$ fault or ne$li$ence, is obli$ed to pa% for the da!a$e done. Such fault or ne$li$ence, if there is no pre9e>istin$ contractual relation bet#een parties, is called a 7uasi9delict and is $overned b% the provisions of this Chapter.'rt.&G. Ever% person !ust, in the e>ercise of his ri$hts and in the perfor!ance of his duties, act #ith "ustice, $ive ever%one his due, and observe honest% and $ood faith.'rt. (&. 'n% person #ho #illfull% causes loss or in"ur% to another in a !anner thatis contrar% to !orals, $ood custo!s or public polic% shall co!pensate the latter for the da!a$e.(; 4& 2. ;d +;+, & Dece!ber &GG4.(4 Sison v. McFuaid, G4 Phil (*&, (*;9(*4 /&G+;0.(+ Cordova v. Cordova, &*( Phil &&)( /&G+)0.epublic of the PhilippinesSUPREME COURTManila2IRS. DIVISION G.R. No. L-40597 June 29, 1979AGUSTINO B. ONG YIU, petitioner, vs.HONORABLE COURT O A!!EALS "n# !HILI!!INE AIR LINES, INC., respondents. $ELENCIO-HERRERA, J.:In this Petition for Review by Certiorari, petitioner, a practicing lawyer and businessman,seeks a reversal of the Decision of the Court of Appeals in CA!.R. "o. #$%%$R, whichreduced his claim for damages for breach of contract of transportation. &he facts are as follows' (n August )*, +,*-, petitioner was a fare paying passenger of respondent Philippine Air .ines, Inc. /PA.0, on board 1light "o. #*2R, from 3actan Cebu, bound for 4utuan City. 5e was scheduled to attend the trial of Civil Case "o. +%%$ and 6pec. Procs. "o. ++)$ in the Court of 1irst Instance, 4ranch II, thereat, set for hearing on August )72+, +,*-. As a passenger, he checked in one piece of luggage, a blue 8maleta8 for which hewas issued Claim Check "o. )+%*R /9:h. 8A80. &he plane left 3actan Airport, Cebu, at about +'%% o;clock P.3., and arrived at 4ancasi airport, 4utuan City, at past )'%% o;clock P.3., of the same day. uoted verbatim' Dear Atty. (ng @iu' &his is with reference to your 6eptember $, +,*-, letter to 3r. Ricardo !. Paloma, Acting 3anager, 6outhern Philippines. 1irst of all, may we apologi=e for the delay in informing you of the result of our investigation since we visited you in your office last August 2+, +,*-. 6ince there are stations other than Cebu which are involved in your case, we have to communicate and await replies from them. Ae regret to informyou that to date we have not found the supposedly lost folder of papers nor have we been able to pinpoint the personnel who allegedly pilferred your baggage. @ou must reali=e that no inventory was taken of the cargo upon loading them on any plane. Conse>uently, we have no way of knowing the real contents of your baggage when same was loaded. Ae reali=ed the inconvenience you encountered of this incident but we trust that you will give us another opportunity to be of better service to you.Bery truly yours, P5I.IPPI"9AIR .I"96, I"C. /6gd0 ?9R93IA6 6. A!uivalent representing the actual value of the lost cargo and the material and packaging costD /c0 +%J of the total amount as an award for and as contingentattorney;s feesD and /d0 to pay the cost of the suit. &he trial court ruled'Considering defendant;s categorical admission of loss and its failure to overcome the presumption of negligence and fault, the Court conclusively finds defendant liable to the plaintiff. &he ne:t point of in>uiry the Court wants to resolve is the e:tent of the liability of the defendant. As stated earlier, plaintiff contends that defendant should be held liable forthe whole value for the loss of the goods in the amount of @+,$$),$%%.%% because the terms appearing at the back of the bill of lading was so written in fine prints and that the same was not signed by plaintiff or shipper thus, they are not bound by clause stated in paragraph +7 of the bill of lading. (n the other hand, defendant merely admitted that it lost the shipment but shall be liable only up to the amount of @+%%,%%%.%%.&he Court subscribes to the provisions of Article +-$% of the "ew Civil Code CArt. +-$%. 8A contract fi:ing the sum that may be recovered by the owner or shipper for the loss, destruction or deterioration of the goods is valid, ifit is reasonable and Eust under the circumstances, and has been fairly and freely agreed upon.8It is re>uired, however, that the contract must be reasonable and Eust under the circumstances and has been fairly and freely agreed upon. &he re>uirements provided in Art. +-$% of the "ew Civil Code must be complied with before a common carrier can claim a limitation of its pecuniary liability in case of loss, destruction or deterioration of thegoods it has undertaken to transport.In the case at bar, the Court is of the view that the re>uirements of said article have not been met. &he fact that those conditions are printed at the back of the bill of lading in letters so small that they are hard to read would not warrant the presumption that the plaintiff or its supplier was aware of these conditions such that he had 8fairly and freely agreed8 to these conditions. It can not be said that the plaintiff had actually entered into a contract with the defendant, embodying the conditions as printed at the back of the bill of lading that was issued by the defendant to plaintiff.(n appeal, the Court of Appeals deleted the award of attorney;s fees but affirmed the trial court;s findings with the additional observation that private respondent can not be bound by the terms and conditions of the bill of lading because it was not privy to the contract of carriage. It said'As to the amount of liability, no evidence appears on record to show that the appellee /5ernande= &rading Co.0 consented to the terms of the 4ill of .ading. &he shipper namedin the 4ill of .ading is 3aruman &rading Co., .td. whom the appellant /9verett 6teamshipCorp.0 contracted with for the transportation of the lost goods.9ven assuming arguendo that the shipper 3aruman &rading Co., .td. accepted the termsof the bill of lading when it delivered the cargo to the appellant, still it does not necessarilyfollow that appellee 5ernande= &rading, Company as consignee is bound thereby considering that the latter was never privy to the shipping contract.::: ::: :::"ever having entered into a contract with the appellant, appellee should therefore not be bound by any of the terms and conditions in the bill of lading.5ence, it follows that the appellee may recover the full value of the shipment lost, the basis of which is not the breach of contract as appellee was never a privy to the any contract with the appellant, but is based on Article +-2$ of the "ew Civil Code, there being no evidence to prove satisfactorily that the appellant has overcome the presumption of negligence provided for in the law.Petitioner now comes to us arguing that the Court of Appeals erred /+0 in ruling that the consent of the consignee to the terms and conditions of the bill of lading is necessary to make such stipulations binding upon itD /)0 in holding that the carrier;s limited package liability as stipulated in the bill of lading does not apply in the instant caseD and /20 in allowing private respondent to fully recover the full alleged value of its lost cargo.Ae shall first resolve the validity of the limited liability clause in the bill of lading.A stipulation in the bill of lading limiting the common carrier;s liability for loss or destruction of a cargo to a certain sum, unless the shipper or owner declares a greater value, is sanctioned by law, particularly Articles +-#, and +-$% of the Civil Code which provide'Art. +-#,. A stipulation that the common carrier;s liability is limited to the value of the goods appearing in the bill of lading, unless the shipper or owner declares a greater value, is binding.Art. +-$%. A contract fi:ing the sum that may be recovered by the owner or shipper for theloss, destruction, or deterioration of the goods is valid, if it is reasonable and Eust under the circumstances, and has been freely and fairly agreed upon.6uch limitedliability clause has also been consistently upheld by this Court in a number of cases. % &hus, in Sea Land Service, nc. vs. ntermediate !""e##ate Court 4, we ruled'It seems clear that even if said section # /$0 of the Carriage of !oods by 6ea Act did not e:ist, the validity and binding effect of the liability limitation clause in the bill of lading hereare nevertheless fully sustainable on the basis alone of the cited Civil Code Provisions. &hat said stipulation is Eust and reasonable is arguable from the fact that it echoes Art. +-$% itself in providing a limit to liability only if a greater value is not declared for the shipment in the bill of lading. &o hold otherwise would amount to >uestioning the Eustness and fairness of the law itself, and this the private respondent does not pretend to do. 4ut over and above that consideration, the Eust and reasonable character of such stipulation is implicit in it giving the shipper or owner the option of avoiding accrual of liability limitation by the simple and surely far from onerous e:pedient of declaring the nature andvalue of the shipment in the bill of lading.Pursuant to the afore>uoted provisions of law, it is re>uired that the stipulation limiting the common carrier;s liability for loss must be 8reasonable and Eust under the circumstances, and has been freely and fairly agreed upon.8&he bill of lading subEect of the present controversy specifically provides, among others'+7. All claims for which the carrier may be liable shall be adEusted and settled on the basis of the shipper;s net invoice cost plus freight and insurance premiums, if paid, and inno event shall the carrier be liable for any loss of possible profits or any conse>uential loss.&he carrier shall not be liable for any loss of or any damage to or in any connection with, goods in an amount e:ceeding (ne 5undred thousand @en in ?apanese Currency /@+%%,%%%.%%0 or its e>uivalent in any other currency per package or customary freight unit /whichever is least0 un#ess the va#ue o$ the goods higher than this amount is dec#ared in %riting &' the shi""er &e$ore recei"t o$ the goods &' the carrier and inserted in the (i## o$ Lading and e)tra $reight is "aid as re*uired. /9mphasis supplied0&he above stipulations are, to our mind, reasonable and Eust. In the bill of lading, the carrier made it clear that its liability would only be up to (ne 5undred &housand /@+%%,%%%.%%0 @en. 5owever, the shipper, 3aruman &rading, had the option to declare a higher valuation if the value of its cargo was higher than the limited liability of the carrier. Considering that the shipper did not declare a higher valuation, it had itself to blame for not complying with the stipulations.&he trial court;s ratiocination that private respondent could not have 8fairly and freely8 agreed to the limited liability clause in the bill of lading because the said conditions were printed in small letters does notmake the bill of lading invalid.Ae ruled in +!L, nc. vs. Court o$ !""ea#s 5 that the 8Eurisprudence on the matter reveals the consistent holding of the court that contracts of adhesion are not invalid "er se and that it has on numerous occasions upheld the binding effect thereof.8 Also, in +hi#i""ine !merican Genera# nsurance Co., nc. vs. S%eet Lines, nc. & this Court, speaking through the learned ?ustice 1loren= D. Regalado, held'. . . ,ng -iu vs. Court o$ !""ea#s, et. a#., instructs us that 8contracts o$ adhesion wherein one party imposes a readymade form of contract on the other . . . are contracts not entirely prohibited. The one %ho adheres to the contract is in rea#it' $ree to re.ect it entire#'/ i$ the adheres he gives his consent.8 n the "resent case, not even an a##egation o$ ignorance o$ a "art' e)cuses non0com"#iance %ith the contractua# sti"u#ations since the res"onsi&i#it' $or ensuring $u## com"rehension o$ the "rovisions o$ a contract o$ carriage devo#ves not on the carrier &ut on the o%ner, shi""er, or consignee as the case ma' &e. /9mphasis supplied0It was further e:plained in ,ng -iu vs. Court o$ !""ea#s 7 that stipulations in contracts of adhesion are valid and binding.Ahile it may be true that petitioner had not signed the planeticket . . ., he is nevertheless bound by the provisions thereof. 86uch provisions have been held to be a part of the contract of carriage, and valid and binding upon the passenger regardless of the latter;s lack of knowledge or assent to the regulation.8 It is what is known as a contract of 8adhesion,8 in regards which it has been said that contracts of adhesion wherein one party imposes a readymade form of contract on the other, as the plane ticket in the case at bar, are contracts not entirely prohibited. &he one who adheres to the contract is in reality free to reEect it entirelyD if he adheres, he gives his consent. . . ., a contract limiting liability upon an agreed valuation does not offend against the policy of the law forbidding one from contracting against his own negligence. /9mphasis supplied0!reater vigilance, however, is re>uired of the courts when dealing with contracts of adhesion in that the said contracts must be carefully scrutini=ed 8in order to shield the unwary /or weaker party0 from deceptive schemes contained in readymade covenants,8 - such as the bill of lading in >uestion. &he stringent re>uirement which the courts are enEoined to observe is in recognition of Article )# of the Civil Code which mandates that 8/i0n all contractual, property or other relations, when one of the parties is at a disadvantage on account of his moral dependence, ignorance, indigence, mental weakness, tender age or other handicap, the courts must be vigilant for his protection.8&he shipper, 3aruman &rading, we assume, has been e:tensively engaged in the trading business. It cannot be said to be ignorant of the business transactions it entered into involving the shipment of its goods to its customers. &he shipper could not have known, or should know the stipulations in the bill of lading and there it should have declared a higher valuation of the goods shipped. 3oreover, 3aruman &rading has not been heard to complain that it has been deceived or rushed into agreeing to ship the cargo in petitioner;s vessel. In fact, it was not even impleaded in this case.&he ne:t issue to be resolved is whether or not private respondent, as consignee, who is not a signatory to the bill of lading is bound by the stipulations thereof.Again, in Sea0Land Service, nc. vs. ntermediate !""e##ate Court /su"ra0, we held that even if the consignee was not a signatory to the contract of carriage between the shipper and the carrier, the consignee can still be bound by the contract. 6peaking through 3r. Chief ?ustice "arvasa, we ruled'&o begin with, there is no >uestion of the right, in principle, of a consignee in a bill of lading to recover from the carrier or shipper for loss of, or damage to goods being transported under said bill, although that document may have beenas in practice it oftentimes isdrawn up only by the consignor and the carrier without the intervention of the onsignee. . . . .. . . the right of a party in the same situation as respondent here, to recover for loss of a shipment consigned to him under a bill of lading drawn up only by and between the shipper and the carrier, springs from either a relation of agency that may e:ist between him and the shipper or consignor, or his status as stranger in whose favor some stipulation is made in said contract, and who becomes a party thereto when he demands fulfillment of that stipulation, in this case the delivery of the goods or cargo shipped. In neither capacity can he assert personally, in bar to any provision of the bill of lading, the alleged circumstance that fair and free agreement to such provision was vitiated by its being in such fine print as to be hardly readable. Parenthetically, it may be observed that in one comparatively recent case /Phoeni: Assurance Company vs. 3acondray K Co., Inc., *# 6CRA +$0 where this Court found that a similar package limitation clause was 8printed in the smallest type on the back of the bill of lading,8 it nonetheless ruled that the consignee was bound thereby on the strength of authority holding that such provisions onliability limitation are as much a part of a bill of lading as through physically in it and as though placed therein by agreement of the parties.&here can, therefore, be no doubt or e>uivocation about the validity and enforceability of freelyagreedupon stipulations in a contract of carriage or bill of lading limiting the liabilityof the carrier to an agreed valuation unless the shipper declares a higher value and inserts it into said contract or bill. &his proposition, moreover, rests upon an almost uniform weight of authority. /9mphasis supplied0.Ahen private respondent formally claimed reimbursement for the missing goods from petitioner and subse>uently filed a case against the latter based on the very same bill of lading, it /private respondent0 accepted the provisions of the contract and thereby made itself a party thereto, or at least has come to court to enforce it. 9 &hus, private respondent cannot now reEect or disregard the carrier;s limited liability stipulation in the bill of lading. In other words, private respondent is bound by the whole stipulations in the bill of lading and must respect the same.Private respondent, however, insists that the carrier should be liable for the full value of the lost cargo in the amount of @+,$$),$%%.%%, considering that the shipper, 3aruman &rading, had 8fully declared the shipment . . ., the contents of each crate, the dimensions, weight and value of the contents,8 10 as shown in the commercial Invoice "o. 3&3,#+.&his claim was denied by petitioner, contending that it did not know of the contents, >uantity and value of 8the shipment which consisted of three prepacked crates described in 4ill of .ading "o. "!($23" merely as ;2 CA696 6PAR9 PAR&6.;8 11&he bill of lading in >uestion confirms petitioner;s contention. &o defeat the carrier;s limited liability, the aforecited Clause +7 of the bill of lading re>uires that the shipper should have declared in writing a higher valuation of its goods before receipt thereof by the carrier and insert the said declaration in the bill of lading, with e:tra freight paid. &hese re>uirements in the bill of lading were never complied with by the shipper, hence, the liability of the carrier under the limited liability clause stands. &he commercial Invoice "o. 3&3,#+ does not in itself sufficiently and convincingly show that petitioner has knowledge of the value of the cargo as contended by private respondent. "o other evidence was proffered by private respondent to support is contention. &hus, we are convinced that petitioner should be liable for the full value of the lost cargo.In fine, the liability of petitioner for the loss of the cargo is limited to (ne 5undred &housand /@+%%,%%%.%%0 @en, pursuant to Clause +7 of the bill of lading.A59R91(R9, the decision of the Court of Appeals dated ?une +#, +,,$ in C.A.!.R. CB "o. #)7%2 is hereby R9B9R69D and 69& A6ID9.6( (RD9R9D.1ega#ado, Me#o, +uno and Mendoza, JJ., concur.oo(no(e)+ Penned by ?ustice Pacita Cani=ares"ye and concurred in by ?ustices Conchita Carpio3orales and Antonio P. 6olanoD 1o##o, pp. 22#%.) Penned by ?udge (scar 3. Payawal, 1o##o, pp. #2$%.2 6t. Paul 1ire and 3arine Insurance Co. vs. 3acondray K Co., -% 6CRA +)) L+,-*MD 6ea .and 6ervices, Inc., vs. Intermediate Appellate Court, +$2 6CRA $$) L+,7-MD Pan American Aorld Airways, Inc. vs. Intermediate Appellate Court, +*# 6CRA )*7 L+,77MD Phil Airlines, Inc. vs. Court of Appeals, )$$ 6CRA *2 L+,,*M.# +$2 6CRA $$) L+,7-M.$ )$$ 6CRA #7, $7 L+,,*M.* )+) 6CRA +,#, )+))+2 L+,,)M.- ,+ 6CRA ))2 L+,-,MD Philippine Airlines, Inc. vs. Court of Appeals, )$$ 6CRA *2 L+,,*M.7 Ayala Corporation vs. Ray 4urton Development Corporation, !.R. "o. +)**,,, August -, +,,7. See a#so Nua Chee !an vs. .aw e!plar% da!a$es or corrective da!a$esB+. 'ttorne%MNs fees e7uivalent to &*R of the a!ounts due and de!andable and a#arded in favor of the plaintiffB and?. .he costs of this proceedin$s.DMDN.he t#o carriers appealed the R.C Decision to the C'.Rulin$ of the Court of 'ppeals67'ffir!in$ the R.C, the Court of 'ppeals debun1ed petitioners clai! that it had !erel% acted as an issuin$ a$ent for the tic1et coverin$ the 8on$ 6on$9Manila le$ of respondents "ourne%. In support of its Decision, the C' 7uoted a purported rulin$ of this Court in 2)% -o$al 3utch Airlines v. Court o= Appeals>M)N as follo#sA'rticle ;* of the =arsa# providin$ that in case of transportation to be perfor!ed b% various successive carriers, the passen$er can ta1e action onl% a$ainst the carrier #ho perfor!ed the transportation durin$ #hich the accident or the dela% occurred presupposes the occurrence of either an accident or dela% in the course of the air trip, and does not appl% if the da!a$e is caused b% the #illful !isconduct on the part of the carriers e!plo%ee or a$ent actin$ #ithin the scope of his e!plo%!ent.It #ould be unfair and ine7uitable to char$e a passen$er #ith auto!atic 1no#led$e or notice of acondition #hich purportedl% #ould e>cuse the carrier fro! liabilit%, #here the notice is #ritten at the bac1 of the tic1et in letters so s!all that one has to use a !a$nif%in$ $lass to read the #ords. .o preclude an% doubt that the contract #as fairl% and freel% a$reed upon #hen the passen$er accepted the passa$e tic1et, the carrier #ho issued the tic1et !ust infor! the passen$er of the conditions prescribed in the tic1et or, in the ver% least, ascertain that the passen$er read the! before he accepted the passa$e tic1et. 'bsent an% sho#in$ that the carriers officials or e!plo%ees dischar$ed this responsibilit% to the passen$er, the latter cannot be bound b% the conditions b% #hich the carrier assu!ed the role of a !ere tic1et9issuin$ a$ent for other airlines and li!ited its liabilit% onl% to unto#ard occurrences in its o#n lines.=here the passa$e tic1ets provide that the carria$e to be perfor!ed thereunder b% several successive carriers is to be re$arded as a sin$le operation, the carrier #hich issued the tic1ets for the entire trip in effect $uaranteed to the passen$er that the latter shall have sure space in the various carriers #hich #ould ferr% hi! throu$h the various se$!ents of the trip, and the tic1et9issuin$ carrier assu!es full responsibilit% for the entire trip and shall be held accountable for the breach of that $uarant% #hether the breach occurred in its o#n lines or in those of the other carriers.GMGNOn P',s appeal, the appellate court held that the carrier had rene$ed on its obli$ation to transport respondent #hen, in spite of the confir!ations he had secured for 2li$ht PR ;&&, his na!e did not appear in the co!puteriEed list of passen$ers. Rulin$ that the airlines ne$li$ence #as the pro>i!ate cause of his e>coriatin$ e>perience, the appellate court sustained the a#ard of !oral and e>e!plar% da!a$es..he C', ho#ever, deleted the R.Cs a#ard of actual da!a$es a!ountin$ to 86Q&4,&().)* and 5SQ(,***.**, because the lost piece of lu$$a$e and clutch ba$ had not actuall% been chec1ed in or delivered to P', for transportation to Manila.89On 'u$ust (), (**&, petitioner filed a Motion for Partial Reconsideration, contendin$ that the appellate court had erroneousl% relied on a !ere s%llabus of 2)% v. CA, not on the actual rulin$ therein. Moreover, it ar$ued that respondent #as full% a#are that the boo1in$ for the P', sector had been !ade onl% upon his re7uestB and that onl% P',, not C',, #as liable for the actual carria$e of that se$!ent. Petitioner li1e#ise pra%ed for a rulin$ on its cross9clai! a$ainst P',, inas!uch as the latters e!plo%ees had acted ne$li$entl%, as found b% the trial court.Den%in$ the Motion, the appellate court ruled that petitioner had failed to raise an% ne# !atter or issue that #ould #arrant a !odification or a reversal of the Decision. 's to the alle$ed !is7uotation, the C' held that #hile the portion it had cited appeared to be different fro! the #ordin$ of the actual rulin$, the variance #as !ore apparent than real since the difference M#asN onl% in for! and not in substance.&*M&*NC', and P', filed separate Petitions to assail the C' Decision. In its October ;, (**& Resolution, this Court denied P',s appeal, doc1eted as @R No. &4G+44, for failure to serve the C' a cop% of the Petition as re7uired b% Section ;, Rule 4+, in relation to Section +/d0 of Rule +?and para$raph ( of Revised Circular No. &9)) of this Court. P',s Motion for Reconsideration #as denied #ith finalit% on anuar% (&, (**(.Onl% the appeal of C',&&M&&N re!ains in this Court.IssuesIn its Me!orandu!, petitioner raises the follo#in$ issues for the Courts considerationA&..he Court of 'ppeals co!!itted "udicial !isconduct in findin$ liabilit% a$ainst the petitioner on the basis of a !is7uotation fro! 6,M Ro%al Dutch 'irlines vs. Court of 'ppeals, et al., ?+ SCR' (;D and in !a$nif%in$ its !isconduct b% den%in$ the petitioners Motion for Reconsideration on a !ere s%llabus, unofficial at that.(. .he Court of 'ppeals co!!itted an error of la# #hen it did not appl% applicable precedents on the case before it.;. .he Court of 'ppeals co!!itted a non se7uitur #hen it did not rule on the cross9clai! of the petitioner.&(M&(N.he Courts Rulin$.he Petition is not !eritorious.1011122irst IssueAAlle"ed .udicial%isconductPetitioner char$es the C' #ith "udicial !isconduct for 7uotin$ fro! and basin$ its rulin$ a$ainstthe t#o airlines on an unofficial s%llabus of this Courts rulin$ in 2)% v. CA. Moreover, such !isconduct #as alle$edl% a$$ravated #hen the C', in an atte!pt to "ustif% its action, held that the difference bet#een the actual rulin$ and the s%llabus #as !ore apparent than real.&;M&;N=e a$ree #ith petitioner that the C' co!!itted a lapse #hen it relied !erel% on the unofficial s%llabus of our rulin$ in 2)% v. CA. Indeed, la#%ers and liti$ants are !andated to 7uote decisions of this Court accuratel%.&4M&4N -% the sa!e to1en, "ud$es should do no less b% strictl% abidin$ b% this rule #hen the% 7uote cases that support their "ud$!ents and decisions. Canon ; of the Code of udicial Conduct en"oins the! to perfor! official duties dili$entl% b% bein$ faithful to the la# and !aintainin$ their professional co!petence.8o#ever, since this case is not ad!inistrative in nature, #e cannot rule on the C' "ustices ad!inistrative liabilit%, if an%, for this lapse. &irst, due process re7uires that in ad!inistrative proceedin$s, the respondents !ust first be $iven an opportunit% to be heard before sanctions can be i!posed. Second, the present action is an appeal fro! the C's Decision, not an ad!inistrativecase a$ainst the !a$istrates concerned. .hese t#o suits are independent of and separate fro! each other and cannot be !i>ed in the sa!e proceedin$s.-% !erel% includin$ the lapse as an assi$ned error here #ithout an% ade7uate and proper ad!inistrative case therefor, petitioner cannot e>pect the i!position of an ad!inistrative sanction.In the case at bar, #e can onl% deter!ine #hether the error in 7uotation #ould be sufficient to reverse or !odif% the C' Decision.Applicabilit$ o= 6,M v. C'In 2)% v. CA, the petitioner therein issued tic1ets to the MendoEa spouses for their #orld tour. .he tour included a -arcelona9,ourdes route, #hich #as serviced b% the Irish airline 'er ,in$us.'t the 6,M office in 2ran1furt, @er!an%, the% obtained a confir!ation fro! 'er ,in$us of theirseat reservations on its 2li$ht )?&. On the da% of their departure, ho#ever, the airline rudel% off9loaded the!.=hen sued for breach of contract, 6,M sou$ht to be e>cused for the #ron$ful conduct of 'er ,in$us b% ar$uin$ that its liabilit% for da!a$es #as li!ited onl% to occurrences on its o#n sectors. .o support its ar$u!ent, it cited 'rticle ;* of the =arsa# Convention, statin$ that #hen transportation #as to be perfor!ed b% various successive carriers, the passen$er could ta1e 1314action onl% a$ainst the carrier that had perfor!ed the transportation #hen the accident or dela% occurred.In holdin$ 6,M liable for da!a$es, #e ruled as follo#sA&..he applicabilit% insisted upon b% the 6,M of article ;* of the =arsa# Convention cannot be sustained. .hat article presupposes the occurrence of either an accident or a dela%, neither of #hich too1 place at the -arcelona airportB #hat is here !anifest, instead, is that the 'er ,in$us, throu$h its !ana$er there, refused to transport the respondents to their planned and contracted destination.(. .he ar$u!ent that the 6,M should not be held accountable for the tortious conduct of 'er ,in$us because of the provision printed on the respondentsL tic1ets e>pressl% li!itin$ the 6,MLs liabilit% for da!a$es onl% to occurrences on its o#n lines is unacceptable. 's noted b% the Court of 'ppeals that condition #as printed in letters so s!all that one #ould have to use a !a$nif%in$ $lass to read the #ords. 5nder the circu!stances, it #ould be unfair and ine7uitable to char$e the respondents #ith auto!atic 1no#led$e or notice of the said condition so as to preclude an% doubt that it #as fairl% and freel% a$reed upon b% the respondents #hen the% accepted the passa$e tic1ets issued to the! b% the 6,M. 's the airline #hich issued those tic1ets#ith the 1no#led$e that the respondents #ould be flo#n on the various le$s of their "ourne% b% different air carriers, the 6,M #as char$eable #ith the dut% and responsibilit% of specificall% infor!in$ the respondents of conditions prescribed in their tic1ets or, in the ver% least, to ascertain that the respondents read the! before the% accepted their passa$e tic1ets. ' thorou$h search of the record, ho#ever, ine>plicabl% fails to sho# that an% effort #as e>erted b% the 6,M officials or e!plo%ees to dischar$e in a proper !anner this responsibilit% to the respondents. Conse7uentl%, #e hold that the respondents cannot be bound b% the provision in 7uestion b% #hich 6,M unilaterall% assu!ed the role of a !ere tic1et9issuin$ a$ent for other airlines and li!ited its liabilit% onl% to unto#ard occurrences on its o#n lines.;. Moreover, as !aintained b% the respondents and the Court of 'ppeals, the passa$e tic1etsof the respondents provide that the carria$e to be perfor!ed thereunder b% several successive carriers is to be re$arded as a sin$le operation, #hich is dia!etricall% inco!patible #ith the theor% of the 6,M that the respondents entered into a series of independent contracts #ith the carriers #hich too1 the! on the various se$!ents of their trip. .his position of 6,M #e re"ect. .he respondents dealt e>clusivel% #ith the 6,M #hich issued the! tic1ets for their entire trip and #hich in effect $uaranteed to the! that the% #ould have sure space in 'er ,in$us fli$ht )?&. .he respondents, under that assurance of the internationall% presti$ious 6,M, naturall% had the ri$ht to e>pect that their tic1ets #ould be honored b% 'er ,in$us to #hich, in the le$al sense, the 6,M had indorsed and in effect $uaranteed the perfor!ance of its principal en$a$e!ent to carr% out the respondentsL scheduled itinerar% previousl% and !utuall% a$reed upon bet#een the parties.4. .he breach of that $uarantee #as a$$ravated b% the discourteous and hi$hl% arbitrar% conduct of an official of the 'er ,in$us #hich the 6,M had en$a$ed to transport the respondents on the -arcelona9,ourdes se$!ent of their itinerar%. It is but "ust and in full accord #ith the polic% e>pressl% e!bodied in our civil la# #hich en"oins courts to be !ore vi$ilant for the protection of acontractin$ part% #ho occupies an inferior position #ith respect to the other contractin$ part%, that the 6,M should be held responsible for the abuse, in"ur% and e!barrass!ent suffered b% the respondents at the hands of a supercilious boor of the 'er ,in$us.&+M&+NIn the instant case, the C' ruled that under the contract of transportation, petitioner 99 as the tic1et9issuin$ carrier /li1e 6,M0 99 #as liable re$ardless of the fact that P', #as to perfor! or had perfor!ed the actual carria$e. It elucidated on this point as follo#sA-% the ver% nature of their contract, defendant9appellant C', is clearl% liable under the contract of carria$e #ith MrespondentN and re!ains to be so, re$ardless of those instances #hen actual carria$e #as to be perfor!ed b% another carrier. .he issuance of a confir!ed C', tic1et in favorof MrespondentN coverin$ his entire trip abroad concretel% attests to this. .his also serves as proof that defendant9appellant C',, in effect $uaranteed that the carrier, such as defendant9appellant P', #ould honor his tic1et, assure hi! of a space therein and transport hi! on a particular se$!ent of his trip.&?M&?NNot#ithstandin$ the errant 7uotation, #e have found after careful deliberation that the assailed Decision is supported in substance b% 2)% v. CA. .he !is7uotation b% the C' cannot serve as basis for the reversal of its rulin$. Nonetheless, to avert si!ilar incidents in the future, this Court hereb% e>horts !e!bers of the bar and the bench to refer to and 7uote fro! the official repositor% of our decisions, the hilippine -eports, #henever practicable.&DM&DN In the absence of this pri!ar% source, #hich is still bein$ updated, the% !a% resort to unofficial sources li1e the SCR'.&)M&)N =e re!ind the! that the Courts ponencia! #hen used to support a "ud$!ent or rulin$, should be 7uoted accuratel%.&GM&GNSecond IssueA)iabilit$ o= the /ic?et-Issuin" Airline =e no# co!e to the !ain issue of #hether C', is liable for da!a$es. Petitioner posits that the C' Decision !ust be annulled, not onl% because it #as rooted on an erroneous 7uotation, but 1516171819also because it disre$arded "urisprudence, notabl% China Airlines v. Intermediate Appellate Court85M(*N and China Airlines v. Court o= Appeals.81M(&N .urisprudence Supports CA 3ecisionIt is si$nificant to note that the contract of air transportation #as bet#een petitioner and respondent, #ith the for!er endorsin$ to P', the 8on$ 6on$9to9Manila se$!ent of the "ourne%. Such contract of carria$e has al#a%s been treated in this "urisdiction as a sin$le operation. .his "urisprudential rule is supported b% the =arsa# Convention,((M((N to #hich the Philippines is a part%, and b% the e>istin$ practices of the International 'ir .ransport 'ssociation /I'.'0.'rticle &, Section ; of the =arsa# Convention statesA.ransportation to be perfor!ed b% several successive air carriers shall be dee!ed, for the purposes of this Convention, to be one undivided transportation, if it has been re$arded b% the parties as a sin$le operation, #hether it has been a$reed upon under the for! of a sin$le contract or of a series of contracts, and it shall not lose its international character !erel% because one contract or a series of contracts is to be perfor!ed entirel% #ithin a territor% sub"ect to the soverei$nt%, suEeraint%, !andate, or authorit% of the sa!e 8i$h Contractin$ Part%.(;M(;N'rticle &+ of I'.'9Reco!!ended Practice si!ilarl% providesACarria$e to be perfor!ed b% several successive carriers under one tic1et, or under a tic1et and an% con"unction tic1et issued there#ith, is re$arded as a sin$le operation.In American Airlines v. Court o= Appeals,(4M(4N #e have noted that under a $eneral pool partnership a$ree!ent, the tic1et9issuin$ airline is the principal in a contract of carria$e, #hile the endorsee9airline is the a$ent.> > > Me!bers of the I'.' are under a $eneral pool partnership a$ree!ent #herein the% act as a$ent of each other in the issuance of tic1ets to contracted passen$ers to boost tic1et sales #orld#ide and at the sa!e ti!e provide passen$ers eas% access to airlines #hich are other#ise inaccessible in so!e parts of the #orld. -oo1in$ and reservation a!on$ airline !e!bers are 2021222324allo#ed even b% telephone and it has beco!e an accepted practice a!on$ the!. ' !e!ber airline #hich enters into a contract of carria$e consistin$ of a series of trips to be perfor!ed b% different carriers is authoriEed to receive the fare for the #hole trip and throu$h the re7uired process of interline settle!ent of accounts b% #a% of the I'.' clearin$ house an airline is dul% co!pensated for the se$!ent of the trip serviced. .hus, #hen the petitioner accepted the unused portion of the con"unction tic1ets, entered it in the I'.' clearin$ house and undertoo1 to transport the private respondent over the route covered b% the unused portion of the con"unction tic1ets, i.e., @eneva to Ne# Jor1, the petitioner tacitl% reco$niEed its co!!it!ent under the I'.' pool arran$e!ent to act as a$ent of the principal contractin$ airline, Sin$apore 'irlines, as to the se$!ent of the trip the petitioner a$reed to underta1e. 's such, the petitioner thereb% assu!ed the obli$ation to ta1e the place of the carrier ori$inall% desi$nated in the ori$inal con"unction tic1et. .he petitioners ar$u!ent that it is not a desi$nated carrier in the ori$inal con"unction tic1ets and that it issued its o#n tic1et is not decisive of its liabilit%. .he ne# tic1et #as si!pl% a replace!ent for the unused portion of the con"unction tic1et, both tic1ets bein$ for the sa!e a!ount of 5SQ (,D?* and havin$ the sa!e points of departure and destination. -% constitutin$ itself as an a$ent of the principal carrier the petitioners underta1in$ should be ta1en as part of a sin$le operation under the contract of carria$e e>ecuted b% the private respondent andSin$apore 'irlines in Manila.(+M(+N,i1e#ise, as the principal in the contract of carria$e, the petitioner in *ritish Airwa$s v. Court o= Appeals8istence of the factual basis for the da!a$es ad"ud$ed a$ainst petitioner and P',. 's a rule, the findin$s of fact of the C' affir!in$ those of the R.C #ill not be disturbed b% this Court.()M()N 25262728Indeed, the Supre!e Court is not a trier of facts. 's a rule also, onl% 7uestions of la# 99 as in the present recourse 99 !a% be raised in petitions for revie# under Rule 4+.Moral da!a$es cannot be a#arded in breaches of carria$e contracts, e>cept in the t#o instances conte!plated in 'rticles &D?4 and (((* of the Civil Code, #hich #e 7uoteA'rticle &D?4. Da!a$es in cases co!prised in this Section shall be a#arded in accordance #ith .itle HVIII of this -oo1, concernin$ Da!a$es. Article 885< shall also appl$ to the death o= a passen"er caused b$ the breach o= contract b$ a common carrier.> > >> > > > > >'rticle (((*. =illful in"ur% to propert% !a% be a le$al $round for a#ardin$ !oral da!a$es if thecourt should find that, under the circu!stances, such da!a$es are "ustl% due. .he sa!e rule applies to breaches o= contract where the de=endant acted =raudulentl$ or in bad =aith. /Italics supplied0.here is no occasion for us to invo1e 'rticle &D?4 here. =e !ust therefore deter!ine if C', or its a$ent /P',0 is $uilt% of bad faith that #ould entitle respondent to !oral da!a$es.In )ope, v. an American 'orld Airwa$s!8@M(GN #e defined bad =aith as a breach of a 1no#n dut% throu$h so!e !otive of interest or ill #ill.In the case at bar, the 1no#n dut% of P', #as to transport herein respondent fro! 8on$ 6on$ to Manila. .hat dut% arose #hen its a$ent confir!ed his reservation for 2li$ht PR ;&&,;*M;*N and it beca!e de!andable #hen he presented hi!self for the trip on Nove!ber (4, &G)&.It is true that due to a t%phoon, P', #as unable to transport respondent on 2li$ht PR ;&& on Nove!ber (4, &G)&. .his fact, ho#ever, did not ter!inate the carriers responsibilit% to its passen$ers. P', voluntaril% obli$ated itself to auto!aticall% transfer all confir!ed passen$ers of PR ;&& to the ne>t available fli$ht, PR ;*D, on the follo#in$ da%.;&M;&N .hat responsibilit% #as subsistin$ #hen respondent, holdin$ a confir!ed tic1et for the for!er fli$ht, presented hi!self for the latter..he records a!pl% establish that he secured repeated confir!ations of his PR ;&& fli$ht on Nove!ber (4, &G)&. 8ence, he had ever% reason to e>pect that he #ould be put on the replace!ent fli$ht as a confir!ed passen$er. Instead, he #as haran$ued and prevented fro! boardin$ the ori$inal and the replace!ent fli$hts. .hus, P', breached its dut% to transport hi!. 293031'fter he had been directed to pa% the ter!inal fee, his pieces of lu$$a$e #ere re!oved fro! the #ei$hin$9in counter despite his protestations.;(M;(N It is relevant to point out that the e!plo%ees of P', #ere utterl% insensitive to his need to be in Manila on Nove!ber (+, &G)&, and to the li1elihood that his business affairs in the cit% #ould be"eopardiEed because of a !ista1e on their part. It #as that !ista1e that had caused the o!ission of his na!e fro! the passen$er list despite his confir!ed fli$ht tic1et. -% !erel% loo1in$ at his tic1et and validation stic1er, it is evident that the $litch #as the airlines fault. 8o#ever, no serious atte!pt #as !ade b% P', to secure the all9i!portant transportation of respondent to Manila on the follo#in$ da%. .o !a1e !atters #orse, P', allo#ed a $roup of non9revenue passen$ers, #ho had no confir!ed tic1ets or reservations, to board 2li$ht PR ;*D.;;M;;N.i!e and ti!e a$ain, this Court has stressed that the business of co!!on carriers is i!bued #ithpublic interest and dut%B therefore, the la# $overnin$ the! i!poses an e>actin$ standard.;4M;4N In Sin"son v. Court o= Appeals!76M;+N #e saidA> > > M.Nhe carrierLs utter lac1 of care and sensitivit% to the needs of its passen$ers, clearl% constitutive of $ross ne$li$ence, rec1lessness and #anton disre$ard of the ri$hts of the latter, MareN acts evidentl% indistin$uishable or no different fro! fraud, !alice and bad faith. 's the ruleno# stands, #here in breachin$ the contract of carria$e the defendant airline is sho#n to have acted fraudulentl%, #ith !alice or in bad faith, the a#ard of !oral and e>e!plar% da!a$es, in addition to actual da!a$es, is proper.;?M;?N /Italics supplied0In Saludo v. Court o= Appeals!7;M;DN the Court re!inded airline co!panies that due to the nature oftheir business, the% !ust not !erel% $ive cursor% instructions to their personnel to be !ore acco!!odatin$ to#ards custo!ers, passen$ers and the $eneral publicB the% !ust require the! tobe so..he acts of P',s e!plo%ees, particularl% Chan, clearl% fell short of the e>traordinar% standard ofcare that the la# re7uires of co!!on carriers.;)M;)N 's narrated in Chans oral deposition,;GM;GN the !anner in #hich the airline dischar$ed its responsibilit% to respondent and its other passen$ers 323334353637!anifested a lac1 of the re7uisite dili$ence and due re$ard for their #elfare. .he pertinent portions of the Oral Deposition are reproduced as follo#sAFNo# %ou said that fli$ht PR ;&& on (4th Nove!ber #as cancelled due to MaN t%phoon and naturall% the passen$ers on said fli$ht had to be acco!!odated on the first fli$ht the follo#in$ da% or the first fli$ht subse7uentl%. M=Nill %ou tell the 8onorable Deposition Officer the procedure follo#ed b% Philippine 'irlines in the handlin$ of passen$ers of cancelled fli$htMsN li1e that of PR ;&& #hich #as cancelled due to MaN t%phoonS' .he procedure #ill beA all the confir!ed passen$ers fro! MPRN ;&& (4th Nove!ber MareN auto!aticall% transferMredN to MPRN ;*D, (+th Nove!berM,N as a protection for all disconfir!ed passen$ers.F 'side fro! this procedureM,N #hat do %ou do #ith the passen$ers on the cancelled fli$ht #ho are e>pected to chec19in on the fli$hts if this fli$ht is cancelled or not operatin$ due to t%phoon or other reasonsMSN In other #ords, are the% not notified of the cancellationS' I thin1 all these passen$ers #ere not notified because of a t%phoon and Philippine 'irlines Reservation #ere MsicN not able to call ever% passen$er b% phone.'tt%. 2rutoAF Did %ou sa% #ere not notifiedS' I believe the% #ere not, but believe !e, I #as on da%9off.'tt%. CalicaAF Per procedure, #hat should have been done b% Reservations Office #hen a fli$ht is cancelled for one reason or anotherS' If there is enou$h ti!e, of course, Reservations Office > > > callMsN up all the passen$ers and tellMsN the! the reason. -ut if there MisN no ti!eM,N then the Reservations Office #ill not be able to do that.4*M4*N> > >> > > > > >383940F I see. Miss Chan, I M#illN sho# %ou a tic1et #hich has been !ar1ed as E>h. ' and '9&. =ill %ou please $o over this tic1et and tell the court #hether this is the tic1et that #as used precisel% b% Mr. Chio1 #hen he chec1ed9in at M2Nli$ht ;*D, (+ Nove!ber )&S' M're %ouN no# as1in$ !e #hether he used this tic1et #ith this stic1erSF No, no, no. .hat #as the tic1et he used.' Jes, Mare %ouN as1in$ !e #hether I sa# this tic1etS'tt%. 2rutoA Jes.' I believe I sa# it.F Jou sa# it, O.6. No# of course %ou #ill a$ree #ith !e Miss Chan that this %ello# stub here #hich has been !ar1ed as E>h. '9&9', sho#MsN that the status on fli$ht ;&&, (4th Nove!ber, is O.6., correctS' Jes.F Jou a$ree #ith !e. 'nd %ou #ill also a$ree #ith !e that in this tic1et of fli$ht ;&&, on this, another stic1er E>h. '9&9- for (4 Nove!ber is O.6.S' Ma% I > > > loo1 at the!. Jes, it sa%s O.6. > > >, but Mthere isN no validation.F O.6. Miss Chan #hat do %ou understand b% these entries here R bar M N ? VS4&M4&N'.his is #hat #e call a co!puter reference.F I see. .his is a co!puter reference sho#in$ that the na!e of Mr. Chio1 has been entered in Philippine 'irlines co!puter, and this is his co!puter nu!ber.' Jes.F No# %ou stated in %our ans#er to the procedure ta1en, that all confir!ed passen$ers on fli$ht ;&&, (4 Nove!berM,N #ere auto!aticall% transferred to ;*D as a protection for the passen$ers, correctS' Correct.F So that since follo#in$ the O.6. status of Mr. Chio1s reservation MonN fli$ht ;&&, MheN #asalso auto!aticall% transferred to fli$ht ;*D the follo#in$ da%S' Should be.41F Should be. O.6. No# do %ou re!e!ber ho# !an% passen$ers > > > #ere transferred fro! fli$ht ;&&, (4 Nove!ber to fli$ht ;*D, (+ Nove!ber )&S' I can onl% $ive %ou a ver% brief idea because that #as supposed to be air bus so it should be able to acco!!odate (4? peopleB but ho# !an% Me>actl%N, I dont 1no#.4(M4(N> > >> > > > > >F So, bet#een si> and ei$ht ocloc1 in the evenin$ of (+ Nove!ber )&, Mr. Chio1 alread% told %ou that he "ust Mca!eN fro! the S#ire -uildin$ #here Philippine 'irlines had MitsN offices and that he told %ou that his space for ;&& (+ Nove!ber )& #as confir!edS' Jes.F .hat is #hat he told %ou. 8e insisted on that fli$htS' Jes.F 'nd did %ou not tr% to call up S#ire -uildin$99 Philippine 'irlines and verif% indeed if Mr. Chio1 #as thereS' S#ire 8ouse buildin$ is not directl% under Philippine 'irlines. it is "ust an a$enc% for sellin$ Philippine 'irlines tic1et. 'nd besides around si> o cloc1 the%re closeMdN in Central.F So this S#ire -uildin$ is an a$enc% authoriEed b% Philippine 'irlines to issue tic1ets for and on behalf of Philippine 'irlines and also...' Jes.F 'nd also to confir! spaces for and on behalf of Philippine 'irlines.' Jes.4;M4;N5nder the fore$oin$ circu!stances, #e cannot appl% our &G)G rulin$ in China Airlines v. Intermediate Appellate Court!99M44N #hich petitioner ur$es us to adopt. In that case, the breach of contract and the ne$li$ence of the carrier in effectin$ the i!!ediate fli$ht connection for therein 424344private respondent #as incurred in $ood faith.4+M4+N 8avin$ found no $ross ne$li$ence or rec1lessness, #e thereb% deleted the a#ard of !oral and e>e!plar% da!a$es a$ainst it.4?M4?N.his Courts &GG( rulin$ in China Airlines v. Court o= Appeals9;M4DN is li1e#ise inapplicable. In that case, #e found no bad faith or !alice in the airlines breach of its contractual obli$ation.4)M4)N =e held that, as sho#n b% the flo# of tele>es fro! one of the airlines offices to the others, petitioner therein had e>ercised dili$ent efforts in assistin$ the private respondent chan$e his fli$ht schedule. In the instant case, petitioner failed to e>hibit the sa!e care and sensitivit% to respondents needs. In Sin"son v. Court o= Appeals!9@M4GN #e saidA> > > 'lthou$h the rule is that !oral da!a$es predicated upon a breach of contract of carria$e !a% onl% be recoverable in instances #here the !ishap results in the death of a passen$er, or #here the carrier is $uilt% of fraud or bad faith, there are situations #here the ne$li$ence of the carrier is so $ross and rec1less as to virtuall% a!ount to bad faith, in #hich case, the passen$er li1e#ise beco!es entitled to recover !oral da!a$es.In the present case, #e stress that respondent had repeatedl% secured confir!ations of his PR ;&&fli$ht on Nove!ber (4, &G)& 99 initiall% fro! C', and subse7uentl% fro! the P', office in 8on$ 6on$. .he status of this fli$ht #as !ar1ed O6 on a validatin$ stic1er placed on his tic1et. .hat stic1er also contained the entr% RMN?V. Ms Chan e>plicitl% ac1no#led$ed that such entr% #as a co!puter reference that !eant that respondents na!e had been entered in P',s co!puter.Since the status of respondent on 2li$ht PR ;&& #as O6, as a !atter of ri$ht testified to b% P',s#itness, he should have been auto!aticall% transferred to and allo#ed to board 2li$ht ;*D the follo#in$ da%. Clearl% resultin$ fro! ne$li$ence on the part of P', #as its clai! that his na!e #as not included in its list of passen$ers for the Nove!ber (4, &G)& PR ;&& fli$ht and, conse7uentl%, in the list of the replace!ent fli$ht PR ;*D. Since he had secured confir!ation of his fli$ht 99 not onl% once, but t#ice 99 b% personall% $oin$ to the carriers offices #here he #as consistentl% assured of a seat thereon 99 P',s ne$li$ence #as so $ross and rec1less that it a!ounted to bad faith.4546474849In vie# of the fore$oin$, #e rule that !oral and e>e!plar%+*M+*N da!a$es #ere properl% a#arded b% the lo#er courts.+&M+&N.hird IssueAropriet$ o= the Cross-Claim=e no# loo1 into the propriet% of the rulin$ on C',s cross9