G.R. No. 187487 - Go Tong Electrical Supply Co., Inc. vs. BPI Family Savings Bank, Inc.

Petitioner: Koninklijke Luchtvaart Maatschappij N.V. (KLM Royal Dutch Airlines). Respondents: Rufino T. Mendoza and Consuelo T. Mendoza (spouses).
Recourse: Petition for certiorari to the Supreme Court from a judgment of the Court of Appeals (CA-G.R. 40620) affirming damages awarded by the Court of First Instance of Manila. Supreme Court decision rendered July 22, 1975 (G.R. No. L-31150), First Division, authored by Justice Castro.

Around March 1965 respondents consulted a travel agency (Philippine Travel Bureau, manager Tirso Reyes) for a round-the-world tour for themselves and two young companions. A 35-leg itinerary was prepared involving several airlines; three of the longest segments were to be via KLM.
Respondents chose a Barcelona–Lourdes routing (only served by Aer Lingus) and asked Reyes to make reservations. Reyes, as an accredited agent of IATA member carriers (including KLM and Aer Lingus), went to KLM which secured seat reservations on the various carriers except Aer Lingus initially. The respondents were issued KLM tickets for the entire trip; the Aer Lingus coupon (flight 861 for June 22, 1965) was marked “RQ” (on request).

After confirmations and travel through Europe, on June 22, 1965 the respondents and their wards arrived at Barcelona airport for the Aer Lingus flight. The Aer Lingus manager directed them to check in and accepted them for passage, but then ordered the respondents off-loaded; they were physically shoved aside with the aid of a policeman and subjected to humiliating epithets (“Conos! Ignorantes Filipinos!”). Their daughter and niece were allowed to board.
Mrs. Mendoza later requested Aer Lingus provide means to get to Lourdes; request denied. Respondents took an alternative third-class train to Lourdes advised by a stranger, arriving next morning without proper clothing or luggage (luggage had gone with Aer Lingus), exposed to drafts and discomfort. They incurred $50 for the train trip; the Aer Lingus plane passage value was $43.35.

On March 17, 1966 respondents sued KLM in the Court of First Instance of Manila for breach of contract of carriage and for humiliating treatment by Aer Lingus manager, treating KLM as principal of Aer Lingus.
Trial court awarded $43.35 (or peso equivalent) as actual damages, P10,000 moral damages, P5,000 exemplary damages, P5,000 attorney’s fees, and litigation expenses. On appeal both parties sought relief; Court of Appeals (Aug. 14, 1969) modified award to $43.35 actual damages; P50,000 moral damages; P6,000 attorney’s fees and costs. KLM sought exoneration via certiorari to the Supreme Court.

KLM defenses: (a) Warsaw Convention applicable; Article 30 limits action to the carrier who performed the segment where the event occurred and exempts other carriers except by express agreement; (b) ticket Conditions of Contract (inside front cover) state carrier liability limited to occurrences on its own line and that a carrier issuing a ticket for carriage over others acts only as agent; (c) KLM acted only as ticket-issuing agent arranging seat reservations and not as principal.
Respondents’ contentions: (a) Article 30 inapplicable because the case involves willful misconduct, not accident or delay; Article 25 bars reliance on Convention limits where damage caused by willful misconduct or by an agent acting within scope of employment; (b) ticket provision limiting liability was printed in very small type—practically unreadable—and KLM did not reasonably inform or ascertain that respondents read the condition; (c) ticket language also characterized the carriage by successive carriers as “a single operation,” evidencing a single continuous contract with KLM as the contracting carrier; (d) respondents dealt exclusively with KLM through the travel agency; KLM issued the tickets and guaranteed space on Aer Lingus, thus assuming responsibility.

Whether KLM, as the carrier issuing tickets for a multi-carrier itinerary, can be held liable for the wrongful refusal and humiliating treatment inflicted by Aer Lingus personnel on the Barcelona–Lourdes segment.
Whether the Warsaw Convention (including Articles 30 and 25) governs and, if so, whether it shields KLM from liability for the conduct complained of.

Whether the limitation on KLM’s liability printed on the ticket (stating liability limited to occurrences on KLM’s own lines and that a carrier issuing a ticket for other lines acts only as agent) binds the respondents.
Whether the ticket provisions describing carriage by successive carriers as “a single operation” should be given effect to treat the journey as a single continuous carriage, thereby affecting responsibility.